Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

GREATER LONDON COUNCIL (MONEY) (No. 2) BILL

Ordered,That the promoters of the Greater London Council (Money) (No. 2) Bill shall have leave to suspend proceedings thereon in order to poceed with the Bill, if they think fit, in the next Session of Parliament, provided that the Agents for the Bill give notice to the Clerks in the Private Bill Office not later than the day before the close of the present Session of their intention to suspend further proceedings and that all fees due on the Bill up to that date be paid;

Ordered,That on the fifth day on which the House sits in the next Session the Bill shall be presented to the House;

Ordered,That there shall be deposited with the Bill a declaration signed by the Agents for the Bill, stating that the Bill is the same, in every respect, as the Bill at the last stage of its proceedings in this House in the present Session;

Ordered,That the Bill shall be laid upon the Table of the House by one of the Clerks in the Private Bill Office on the next meeting of the House after the day on which the Bill has been presented and, when so laid, shall be read the first and second time (and shall be recorded in the Journal of the House as having been so read) and, having been amended by the Commitee in the present Session, shall be ordered to lie upon the Table;

Ordered,That no further fees shall be charged in respect of any proceedings on the Bill in respect of which fees have already been incurred during the present Session;

Ordered,That these Orders be Standing Orders of the House. — [The Second Deputy Chairman of Ways and Means.]

LONDON DOCKLANDS RAILWAY (No. 2) BILL

Ordered,That the Promoters of the London Docklands Railway (No. 2) Bill shall have leave to suspend proceedings thereon on order to proceed with the Bill, if they think fit, in the next Session of Parliament, provided that the Agents for the Bill give notice to the Clerks in the Private Bill Office not later than the day before the close of the present Session of their intention to suspend further proceedings and that all fees due on the Bill up to that date be paid;

Ordered,That on the fifth day on which the House sits in the next Session the Bill shall be presented to the House;

Ordered,That there shall be deposited with the Bill a declaration signed by the Agents for the Bill, stating that the Bill is the same, in every respect, as the Bill at the last stage of its proceedings in this House in the present Session;

Ordered,That the Bill shall be laid upon the Table of the House by one of the Clerks in the Private Bill Office on the next meeting of the House after the day on which the Bill has been presented and, when so laid, shall be read the first and second time (and shall be recorded in the Journal of this House as having been so read) and shall be orderd to be read the third time;

Ordered,That no further fees shall be charged in respect of any proceedings on the Bill in respect of which fees have already been incurred during the present Session;

Ordered,That these orders be Standing Orders of the House. — [The Second Deputy Chairman of Ways and Means.]

Oral Answers to Questions — ENVIRONMENT

Local Government Reform

Mr. Wareing: asked the Secretary of State for the Environment if he will make a statement on his most recent discussions in respect of his proposals to abolish the Greater London council and metropolitan county councils.

The Secretary of State for the Environment (Mr. Patrick Jenkin): Many councils and other bodies are discussing the details of abolition with Ministers and officials, but some continue to refuse to take part. They will have only themselves to blame if they do not like what is decided.

Mr. Wareing: While commiserating with the Secretary of State on his retaining his present portfolio, in the light of his recent announcement that he is setting up two inquiries into local government finance, may I ask why he continues to ignore the call from many quarters for the setting up of an independent inquiry into finance and structure? Does he not understand that finance and structure cannot be divorced? Is he so hell bent upon his abolition legislation that he ignores the response that is coming from local authorities and other people?

Mr. Jenkin: I do not believe that any inquiry into the abolition of the metropolitan county councils and the GLC would serve any purpose. It is clear that there is widespread support in the metropolitan areas for the simplification of the structure of local government, and we are confident that it is the correct course to pursue.

Mr. Heddle: Does my right hon. Friend agree that the by-election inspired by Mr. Livingstone and his cohorts in August was an expensive and meaningless sham, that the turnout was ludicrously low; and that, in fact, the abolition of those authorities will return democracy not to Whitehall, as the advertisements would have us believe, but to the directly elected borough councils, which are very responsive to the needs and wishes of the ratepayers?

Mr. Jenkin: I agree with my hon. Friend that those manufactured by-elections were an expensive stunt which failed. I also agree with my hon. Friend that the GLC's entire propanganda campaign is founded upon a falsehood, in that it does not pay any attention to the 32 London boroughs and the City of London, which will inherit the vast majority of services which will be devolved from it.

Mr. Simon Hughes: Does the Secretary of State accept that whereas there may be some support, there is certainly widespread anxiety in the metropolitan counties that the details of the abolition proposals have not been thought out or argued through and that there is now a case in those six counties and in London for the Secretary of State to have a separate local inquiry, with the district and county authorities and the public making a contribution for the first time? Until that happens this will be a bigger muddle than any of the other reorganisations that local government has gone through at the behest of the Government and their Conservative predecessors.

Mr. Jenkin: I disagree with the hon. Gentleman. I have already dealt with the subject of the inquiry. The hon.

Gentleman is holding in his hand the document in which we set out the details of how the services will be devolved to the lower, democratically elected tier of government. The matter will now be for debate in both this House and the other place when the Bill is introduced, as I hope it will be, early in the next Session of Parliament.

Mr. Douglas Hogg: Does my right hon. Friend accept that in essence his proposals represent an addition in powers to the district and borough councils, which are in closer contact with the electorate than the existing authorities, and that, that being so, his proposals are an extension, not a diminution, of democracy?

Mr. Jenkin: I congratulate my hon. Friend on having secured his freedom. He is right. The district authorities in the metropolitan areas are the real organs of local government. They are closer to the people. There are many more councillors on those authorities who represent the people. This will be an extension of democracy, as my hon. Friend rightly said.

Dr. Cunningham: In personal terms, may I first say how much we welcome the presence of the Secretary of State today and the fact that he escaped the appalling and despicable violence in Brighton? We also welcome the right hon. Member for Mole Valley (Mr. Baker) to his new appointment as Minister for Local Government. I understand the right hon. Gentleman to be something of an expert in doggerel and verse. It may be that he will be able to make something of Government policy.
As for the question from my hon. Friend the Member for Liverpool, West Derby (Mr. Wareing), can the Secretary of State honestly confirm what he has just said —that there is overwhelming support in London and the metropolitan counties for the Government's policy? Is not the reverse the truth? Is not the overwhelming burden of evidence against what the Government proposed? Why has the Secretary of State now decided to hold an inquiry into local government finance, when only a few months ago his colleague in the House of Lords was saying that no such inquiry would be of any value?

Mr. Jenkin: The hon. Member for Copeland (Dr. Cunningham) has himself been urging that there should be an inquiry into the system of local government finance. That being so, I hope that he welcomed warmly my announcement at Brighton and a few weeks ago.
I thank the hon. Gentleman for his personal remarks. Right hon. and hon. Members on the Government Benches very much appreciate the way in which so many members of the Labour party have been round in their condemnation of the appalling act of terrorism at Brighton.
I said that there was widespread support for the Government's proposals, especially among those who follow local government affairs. Of course, popular opinion has been fed with a tissue of lies at ratepayers' expense by a propaganda campaign spread across hoardings and newspapers in London and in our metropolitan counties. Perhaps it is not surprising that some people have been a bit misled.

Mr. Pike: asked the Secretary of State for the Environment whether he proposes to introduce in the next Session of Parliament any changes in the structure of local government in the non-metropolitan counties in England.

The Minister for Local Government (Mr. Kenneth Baker): No.

Mr. Pike: Does the Minister recognise that ever since his Government were elected their actions have severely, restricted the freedoms of local government? Is it not time that more power was given back to local government? Would it not be appropriate in such a review to introduce organic change and allow certain services to be given back to borough councils, which are closer to the people whom they represent? I have in mind, for example, social services, which would be more appropriately tied up with the housing service.

Mr. Baker: The hon. Gentleman has made the point that my right hon. Friend made about the abolition of the metropolitan counties. The Government are very much it favour of the devolution of services to local authorities. As my hon. Friend the Member for Grantham (Mr. Hogg) indicated, that is the thrust of our policy. I appreciate that Burnley used to be a county borough and that it had greater degree of independence in the past, but I think that the effect of the distribution of functions between the upper and lower tiers in the county councils which we an abolishing is that the senior partners will be the London boroughs and the metropolitan districts.

Acid Deposition

Mr. Allan Roberts: asked the Secretary of State for the Environment what recent representations he hay received on acid deposition; and if he will make statement.

The Parliamentary Under-Secretary of State for the Environment (Mr. William Waldegrave): In the last three months my right hon. Friend has received about 40 representations about the effects of acid deposition. We have also, of course, recently received the Environment Select Committee's report on this subject, to which the Government's response will be published shortly.

Mr. Roberts: Will the Minister undertake to publish that response as quickly as possible and ensure that there is a full debate in the House on the report of the Select Committee, as it is obvious from the evidence that the Select Committee received that the problem is extremely urgent? Damage is now occurring to the British environment as a result of sulphur and nitrogen emissions. We should be warned clearly in advance by the damage to forests and lakes in central Europe and Scandinavia.

Mr. Waldegrave: The answer to the first part of the hon. Gentleman's supplementary question is yes. The second part is not for me, but I shall report it to those who are responsible for such matters.

Mr. Forman: Although it may be necessary to press ahead with further scientific research into this serious problem, may I ask whether my hon. Friend and his Department accept that there is a strong argument for pursuing in parallel the imposition of special equipment in some power stations on a pilot basis to ascertain whether the practical effect would be to limit this harmful pollution?

Mr. Waldegrave: That was one of the recommendations of the Royal Commission to which the Government will be responding. It is worth remembering that Britain has made a major contribution already. That fact is sometimes forgotten. From the peak of our deposition we have achieved a diminution of nearly 40 per cent., which is more than can be said for any other country.

Mr. Alton: When does the Minister expect to respond to the reports of Royal Commission and of the Select Committee? When do the Government expect to be able to comply with the EEC directive on emission control? Will grants be made available to the ecclesiastical authorities in view of the damage that is being caused to many of our churches by acid deposition?

Mr. Waldegrave: There will be no unnecessary delay in response to the reports of the Royal Commission and of the Select Committee. The negotiations on the large plan directive have only just started. The British Government and many other countries, have serious reservations about the target figures for sulphur and nitrogen that appear it the draft proposals.

Mr. Chapman: If the Government are shortly to make a response to the Select Committee's report, will my hon. Friend confirm that the Committee's recommendation, that new motor vehicles should be designed so that then is a 40 per cent. reduction in nitrogen oxide emissions, both a feasible and practical step to take?

Mr. Waldegrave: Without pre-empting the response to the Select Committee's report, I can say that the Government have made no secret of their view that the lean-burn engine, the route recommended by the Select Committee, is the sensible way to proceed.

Dr. David Clark: In the light of the Select Committee's report, the Royal Commission's report and growing public concern on this issue, will the Minister face his international and national responsibilities and instigate immediate action, and, in addition, set up a national inquiry into the effect of acidic emissions on both urban and rural environments?

Mr. Waldegrave: With respect to the hon. Gentleman, calls for immediate action and inquiries are perhaps the easy part of the response. The British contribution to diminishing the output of acid emission into the atmosphere has been considerable. I do not agree with Labour Members that the reduction is the result of the recession. Fuel substitution and fuel economy have played a major part in the diminution. We should not rush into action without taking a careful view of the costs and benefits involved.

Wytch Farm

Mr. Kirkwood: asked the Secretary of State for the Environment if he will make a statement on the environmental implications of the proposed development of the onshore oilfield at Wytch Farm.

Mr. Kenneth Baker: I understand that BP's proposals at Wytch Farm are currently subject to consultation with interested parties, and a planning application is expected in due course. I am well aware of the sensitive environmental issues raised by these proposals, and would expect any application to be subject to rigorous scrutiny by Dorset county council in the first instance.

Mr. Kirkwood: I appreciate the national importance of the sensitive ecological site at Wytch Farm, but will the Minister use his good offices to require British Petroleum, if he thinks that it is not measuring up to the needs of the site, to undertake a complete hydrological survey of the Poole harbour area and an ecological survey of the island and the Studland peninsula?

Mr. Baker: In the first instance, as I said in my original reply, this must be a matter for Dorset county council in the light of the policies of its approved structure plan and other considerations. I am glad that widespread consultation is taking place. I pay tribute to the county council for imposing restrictions on the first development of Wytch Farm which have made it environmentally acceptable.

Mr. Ward: Is my right hon. Friend aware that close consultation and co-operation is already taking place between BP and the local authorities? Will my right hon. Friend bear in mind the need to protect the environmental safety of Poole harbour, because it is not only a unique leisure and commercial centre but a source of income for local fishermen? I hope that my right hon. Friend will be reassured that we on the south coast are as concerned about the environment as anyone from the more northern parts of the kingdom.

Mr. Baker: I fully support what my hon. Friend has said. Poole harbour is an important place, for recreation, leisure and environmental reasons. I am glad that widespread consultations are occurring. I would have excepted Dorset county council to undertake those consultatons and to hold the public meetings it has arranged. I assure the House that onshore oil and gas development will not be permitted to proceed unless the proposals are environmentally acceptable.

Mr. David Atkinson: I accept that we need to be ultra vigilant about protecting the environment in south Dorset, but does my hon. Friend agree that BP has shown itself to be a highly responsible organisation in protecting the environment and in its obligations to the local communities, particularly with the Sullom Voe oil terminal in the Shetlands, and that is no reason to suppose that it will not act in the same way at Wytch Farm?

Mr. Baker: I agree with my hon. Friend. There must be responsibility in these matters on all sides. I pay tribute to BP for what it has done in its developments in north Scotland and the islands. I am glad that there are widespread consultations involving the people living locally whom my hon. Friends the Members for Poole (Mr. Ward) and for Bournemouth, East (Mr. Atkinson) represent.

Mobile Home Dwellers

Sir John Biggs-Davison: asked the Secretary of State for the Environment if he will introduce legislation to enable permanently settled dwellers in mobile homes to claim compensation for noise and disturbance resulting from the construction of a motorway.

Mr. Waldegrave: We have no plans to do so.

Sir John Biggs-Davison: Does my hon. Friend realise that constituents in Woodbine Close, who are ratepayers in Epping Forest, live and suffer as close to the M25 as I am to you, Mr. Speaker, but are denied compensation as mobile home dwellers? Since they are in fact permanent dwellers, will my hon. Friend ensure that they obtain justice?

Mr. Waldegrave: My hon. Friend has brought this case to the Department's attention. Changing the Land Compensation Act 1973 is a complicated matter. My hon.

Friend might consider discussing the matter with Ministers to ascertain whether we can find a way through the problem.

Local Authority House Building

Mr. Lofthouse: asked the Secretary of State for the Environment if he expects more local authority houses to be started in the financial year 1985–86 than in 1984–85.

The Minister for Housing and Construction (Mr. Ian Gow): It is up to local authorities to decide, within the resources made available to them, how many houses to start in each financial year. For that reason, the Department does not make forecasts of house building starts. Decisions about resources which will be made available for local authority housing next year have still to be taken.

Mr. Lofthouse: Does the Minister agree that since 1979 local authority housing capital expenditure has been cut by about 50 per cent.? Does he further agree that if that position continues we shall face a crisis similar to that in the 1960s? At that time, Governments were encouraging local authorities to go into the development of factory-built houses. Consequently, the nation is now facing a bill of about £10 million to demolish or repair those properties.

Mr. Gow: In the current financial year we have made available for public sector capital investment in housing more than £3·25 billion, of which the local authority share is £2·5 billion. The particular needs of each authority will be taken into account before my right hon. Friend the Secretary of State makes next year's housing investment allocations to each local authority.

Mr. Powley: Does my hon. Friend agree that, rather than continuing to build more new council houses, local authorities would do better employing the available resources to bring back into service those council house properties that have been left empty for many months and are a deteriorating eyesore in local communities?

Mr. Gow: I agree entirely with my hon. Friend. More than 25,000 local authority dwellings have been empty for more than a year—the majority in authorities controlled by the Labour party.

Mr. Hardy: Does the Minister accept that, because in recent years we have been clearing no more than between one five-hundredth and one one-thousandth of the housing stock annually, we are merely storing up enormous trouble for years ahead? As that is happening when there is high unemployment in the building industry, the practice can only be regarded as absurd and dangerous.

Mr. Gow: The hon. Gentleman overlooks the very substantial sums which the Government have made available for public sector housing this year.

Mr. John Fraser: The Minister is steering his Department towards a new slumdon and housing crisis, with the Chancellor of the Exchequer as the back seat driver. Has he not noticed the evidence of the Association of Metropolitan Authorities to the inquiry into British housing, that it will take 900 years to replace the present deteriorating stock, and that public expenditure on housing has now been cut by two thirds since 1979? I ask the hon. Gentleman to start to use a combination of both humanity


and common sense and to put public expenditure on housing on to an upward trend to solve human problems and to provide employment.

Mr. Gow: The hon. Gentleman's memory is characteristically selective. He will remember that when he first entered the House he was a member of Lambeth borough council and that the system of control of local authority capital expenditure which then applied was far more detailed than is the case today. I also remind him that between 1974 and 1979, when he adorned the Labour Government, public sector investment in housing fell by 45 per cent. While this Government have been in power it has fallen by 17 per cent. The hon. Gentleman will also remember the letter which his right hon. Friend the then Chancellor wrote on 15 December 1976 following a cut of £1 billion in public expenditure under the Government of which he was a member.

Departmental Costs

Mr. Thurnham: asked the Secretary of State for the Environment if he has plans to make further savings to reduce the projected total running costs of his Department in 1984–85.

Mr. Patrick Jenkin: I use MINIS and my Department's budgeting systems to keep these costs under close and regular review.

Mr. Thurnham: Will my right hon. Friend indicate the reduction in staff numbers and the consequent economies achieved since he took office?

Mr. Jenkin: Since the Government took office in 1979, over the past five years the number of staff in post in the Department of the Environment, central, has been reduced by 41 per cent., from over 11,000 to 6,600. The number in the Property Services Agency has been reduced by 30 per cent., from 39,000 to 27,200. After allowing for the cost of work contracted out, the resulting savings over the five-year period amount to almost £200 million.

Mr. Tony Banks: We notice with great interest the new Minister for Local Government, who comes like hangman's rope to support the Secretary of State. Will the right hon. Gentleman tell his new Minister how many staff are employed in the Department of the Environment on matters associated with the abolition of the GLC and the metropolitan county councils and how much it is costing?

Mr. Jenkin: If the hon. Gentleman cares to table a question, we shall give him an answer.

Mr. Farr: I congratulate my right hon. Friend on the economies he has made in his Department. Will he have a look at another way in which substantial economies can be made in many midland cities—by encouraging some reluctant city councils to stop sitting on large parcels of derelict land which, for some reason or other, they seem to be disinclined to sell for housing purposes?

Mr. Jenkin: My hon. Friend will have noticed that we recently served the first notices under the land registration procedures under the 1980 Act. We have already had success, in that some of those parcels of land have now been sold. We shall pursue others to completion. On the basis of our success, I give the warning that if authorities unnecessarily hold on to land for which they have no immediate purpose, we will take steps to ensure that it is

put on the market to be used for housing and other purposes. It is absurd that substantial quantities of often urban land are sterilised in this way because public authorities are not prepared to dispose of them.

Mr. Cohen: Could not the Secretary of State save some of his Department's costs by scrapping the advertising campaign—[Interruption]—on the unpopular Rates Act, which is just a waste of taxpayers' money?

Mr. Jenkin: I think the hon. Gentleman recognises that he has scored an own goal.

Rates Act 1984 (Designations)

Mr. Dobson: asked the Secretary of State for the Environment when he next proposes meeting the chairman of the Association of Metropolitan Authorities to discuss the designations made under the Rates Act.

Mr. Patrick Jenkin: The AMA has not asked for such a meeting; if it does I will be happy to meet the chairman.

Mr. Dobson: Does the Secretary of State recall that when he announced the expenditure levels for the designated authorities he gave the impression that they would have to cut their expenditure by 5 or 6 per cent.? Does he now accept that the average reduction being sought from them is 11 per cent., and that Camden council is expected to cut its spending by 15 per cent., Lewisham by 14 per cent. and Leicester by 15 per cent.? Does the right hon. Gentleman not accept that he is trying to perpetrate a totally monstrous deception on the people in those areas, and on the House?

Mr. Jenkin: It is nothing of the sort. We made it clear that our intention is that the real spending of local authorities should be held to the same cash level next year as this year. Of course, we do not have information, and the authorities are not obliged to supply any information, on their use of funds and other balances and accounting devices which they may have used to reach this year's expenditure. That is precisely why the House provided those authorities which felt that the limit which we had set was unreasonable with an opportunity to come along and seek a redetermination of it. However, it is a fact that none has done so. I must assume from that that the authorities are perfectly prepared to live within the limit that I have set.

Mr. Cartwright: Does the Secretary of State not yet understand that rate-capped authorities are effectively prevented from seeking formal derogation, because to do so would automatically bestow on him wide-ranging powers of interference in their internal affairs? Given that, is he willing to hold informal discussions with those rate-capped authorities which are anxious to show him that the expenditure ceilings imposed on them are unreasonably harsh?

Mr. Jenkin: The hon. Gentleman knows that such informal discussions are taking place in a number of cases. I am aware of the anxiety that some councils have expressed and that is why I have made it abundantly clear—I shall send the hon. Gentleman a copy of what I said to the AMA at Doncaster — that it is no part of the Government's intention to interfere in the details of local authority spending. My only concern is to set the upper limit in accordance with the powers that the House has conferred on the Government Any authority which is


worried that to apply for a redetermination will allow me to interfere right across the board can dismiss its concern. That is not my intention. I should add that it is not too late for those who feel that the limit is unreasonable to come along and apply for a redetermination.

Mr. Tracey: In addition to discussing any of the points raised by Opposition Members, will my right hon. Friend never lose an opportunity to put it to the chairman of the AMA that high penal rates on industry inevitably mean lost jobs?

Mr. Jenkin: That is one of the main reasons why we introduced, and the House passed, the Rates Act giving us powers to cut the rates of the highest spending local authorities.

Dr. Cunningham: Is it not dishonest of the Secretary of State to say that he did not have information from local authorities about their expenditure from balances and reserves? Was not such information given to him by authorities in the normal returns that they send to his Department? Was not he admitting, at the AMA conference at Doncaster, that he had that information and that his statement to the House that cuts in budgets of 5 per cent. were all that were required was patently dishonest? As he very well knows, the average cut being required of local authorities is of the order of 10 to 11 per cent. Why does he not come clean and admit it?

Mr. Jenkin: My officials do not have the details on the use of funds and balances and other accounting devices that are used by local authorities to arrive at this year's budget—[Interruption] We do not have a complete picture. I am sure that it was right to start from the published figures and to say that our intention was that authorities should spend no more next year than they are spending in cash this year.
Of course, because of the use of balances—many authorities have made it clear that that is how they arrived at this year's figure—it may be appropriate for them to apply for redetermination. The House has given them that escape hatch. The burden will fall upon them and the communities which they serve if they fail to use that opportunity and have to make bigger cuts than we ever intended. Local authorities are empowered to ask. I hope that they will ask, because our intention is not that they should have to make cuts of anything like the proportion referred to by the hon. Gentleman.

House Building

Mr. John Fraser: asked the Secretary of State for the Environment what he now estimates the effect will be on public housing starts of his announcement of 18 July about local authority capital expenditure.

Mr. Gow: It is for each local authority to decide which projects, if any, need to be delayed in order to comply with my right hon. Friend's request for restraint.

Mr. Fraser: How much money was seized by the Treasury from local authorities when they were prevented from spending the capital receipts from the sales of council houses sold before the beginning of this financial year? How many houses could have been built or improved if local authorities could have spent that money? Can the Minister give a categorical assurance that no more housing investment cuts will be made in the current financial year?

Mr. Gow: The request by my right hon. Friend the Secretary of State on 18 July was made so that local authority capital expenditure this year should not breach what everybody understood and knew to be the limit placed by the Government. It was a request only to stay within the previously announced cash limit. Many local authorities are complying with my right hon. Friend's request for restraint and I hope that all will continue to do so.

Mr. McCrindle: To relieve local authorities of the problems of providing adequate housing for rent, why does my hon. Friend not redouble his efforts to persuade institutions such as property funds and building societies to take a greater interest in progressively providing housing for rent? In the process of such discussions, will he not entirely exclude the possibility of one day privatising the Housing Corporation?

Mr. Gow: We have no plans to privatise the Housing Corporation. I am happy to pay tribute to the voluntary housing movement, which has rendered immense service to the cause of housing the British people. My hon. Friend asks about the provision of housing for rent. Not the least of the problems in connection with accommodation for rent in the private sector is the Labour party's attitude, which has discouraged people from providing such houses.

Local Authority Budgets

Mr. Ray Powell: asked the Secretary of State for the Environment how many local authorities are incurring holdback on the basis of their 1984–85 budgets.

Mr. Kenneth Baker: There are currently 139 English local authorities incurring holdback on the basis of the 1984–85 budgets.

Mr. Powell: Is the Minister aware that hundreds of billions of pounds are being taken away from local authorities by the holdback policy? Should he not now consider giving local authorities the power to spend some of their own money without so much restriction? Is the Minister aware that authorities such as Mid-Glamorgan will have to cut essential services such as nursery provision as a direct result of the Government's holdback policies? Is it not time for the Government to give serious consideration to helping such authorities, so that they can retain essential and legal responsibilities?

Mr. Baker: Mid-Glamorgan's position is a matter for the Secretary of State for Wales. I have enough problems with English authorities. Every Government since the war have taken a view on the aggregate total amount of local expenditure. We have introduced a system which ensures that Government spending at local level is constrained. Even so, there will be an overspend this year of about £848 million, 75 per cent. of which involves only 12 councils.

Rates Act 1984 (Designations)

Mr. Mikardo: asked the Secretary of State for the Environment what representations he has received to date from those local authorities designated under the Rates Act.

Mr. Proctor: asked the Secretary of State for the Environment what representations he has received from local authorities and others concerning his rate-capping proposals; and if he will make a statement.

Mr. Patrick Jenkin: I have received a number of representations, but no authority has applied for a redetermination of its expenditure level.

Mr. Mikardo: It is well-known that there has been a great wave of protest from both Conservative and Labour-controlled designated authorities and from members of all parties who are members of those authorities. Is the right hon. Gentleman taking the least notice of such representations, or is he just thumbing his nose at those people?

Mr. Jenkin: Two authorities led by Conservative councillors, Portsmouth and Brent, have told me that it is their intention to tailor their expenditure to live within the limits that we have set. One of those authorities has said that it hopes to get down to its target, and I welcome that. As to the remaining 16 authorities, I can only repeat what I said earlier. The fact that they have not applied for a redetermination means that they are prepared to live within whatever rates limits we set, following the expenditure limits announced in July.

Mr. Proctor: Could one of the reasons why Basildon district council has not exercised its right under the Rates Act to appeal to the Secretary of State be found in the Audit Commission report on Basildon, commissioned by the district council, which showed—

Mr. Willie W. Hamilton: It exonerates the council.

Mr. Proctor: If it exonerates the council, why did the report claim that Basildon district council, compared with an average authority, spends £600,000 more on the administration of housing, or £100 more for every council house that it owns, than an average authority? Does that not make nonsense of prospects of cuts in real essential services in Basildon?

Mr. Jenkin: My hon. Friend is right, and it so happens that the cut in expenditure that Basildon would need to make to comply with the limit that I have set is precisely that sum of £600,000 which the Audit Commission identified as the excess housing administration expenditure compared with the generality of housing authorities.
I do not think that Basildon will find that difficult.

Mr. Chris Smith: If the Secretary of State is so adamant that he does not intend to use the powers given to him by the Rates Act to determine the individual details of local authority spending if local authorities seek redetermination under the Act, can he tell the House why he insisted, during the passage of that measure through the House, on the inclusion of those powers within the Act?

Mr. Jenkin: The hon. Gentleman was a member of the Committee, and he heard both me and my hon. Friends, speaking from the Front Bench on that Committee, explaining precisely the circumstances in which we would use the powers. Those are that, if we felt that an authority which came along and applied for redetermination could not make the necessary reductions in one year, we should put a condition on that it should do so in more than one year. I said that at the Association of Metropolitan Authorities' conference and I say it again now.
I cannot, in compliance with the law, rule out for all time the possibility of using the power in a wider sense. However, at the the moment I cannot see any circumstance in which I should wish to use the power more widely than that. I hope that authorities which genuinely feel that they have been unfairly treated because of their use of funds in the setting of limits will exercise the power. Time is getting short, because we shall soon have to set the rate limits, and by that time it will be too late.

Mr. Peter Bruinvels: Will my right hon. Friend take note that, no matter what representations or bleatings he may receive from Leicester city council, which, as he knows is Labour-controlled, he should ensure that rate capping is proceeded with in Leicester because the ratepayers and citizens alike need it and demand it today, not even tomorrow?

Mr. Jenkin: I can give my hon. Friend precisely the assurance that he seeks. The law is the law on the statute book. The procedures will be applied, and if Leicester does not apply for redetermination, a rate will be set which will be relative to the expenditure limit that we have fixed for it. I can tell my hon. Friend that in that case the rates in Leicester will be lower than they otherwise would have been.

Mr. Straw: Does the Secretary of State understand that local authorities which are rate-capped feel themselves to be caught in a "Catch-22" situation by the Secretary of State's powers to impose lower expenditure limits or higher limits with conditions if a redetermination is applied for? Does he also understand that such is the breakdown of trust of Labour and Conservative authorities of his Department and the Ministers that, in the absence of categorical and bankable assurances that he will not impose conditions or lower limits, authorities are scared about making applications to him?
As the right hon. Gentleman has admitted that the effect of his expenditure limits will be to impose cuts of about 11 per cent. on authorities—because he failed to take account of their use of balances—will he withdraw his original July statement and seek to have proper negotiations on the basis of the real levels of expenditure in the 16 rate-capped Labour authorities?

Mr. Jenkin: Of course I will not. The Act lays down the procedure for those discussions to take place. They need to be initiated by the authorities concerned, and it is up to them to use the procedures.

Gipsy Sites (London)

Mr. Greenway: asked the Secretary of State for the Environment against what criteria he has exempted three London boroughs from designating gipsy sites; and if he will make a statement.

Mr. Gow: In designating Camden, Islington and Westminster, account was taken of the exceptional difficulty in these three inner London boroughs of finding land suitable for a gipsy site and of the size and nature of the gipsy presence in those areas. The decisions in each case were taken by the then Secretaries of State and the relevant statutory instruments were approved by Parliament.

Mr. Greenway: Bearing in mind that thousands of my constituents have attended public meetings on this matter,


may I ask for my hon. Friend's assistance in resisting GLC and Labour party pressure to redesignate Kensington road and Ruislip road in my consitituency as gipsy sites? The people of the area suffered vandalism, theft and other troubles from these tinkers. [Interruption.] Oh yes, they did. It is no good Labour Members saying anything else. Why should Ealing be designated as a gipsy authority? There is no more land in Ealing than there is in the three boroughs mentioned in my hon. Friend's reply. If they do not have to have gipsies on Hampstead Heath, because of Labour politicians, why do we have to have them in Ealing?

Mr. Gow: I understand my hon. Friend's depth of feeling and I ackowledge the great tenacity that he has shown in pursuing the interests of his constituents. He will know that on 11 September a meeting took place between representatives of the London borough of Ealing and my hon. Friend the Under-Secretary, at which the borough acknowledged that it was necessary for it to find a suitable gipsy site. Correspondence between the borough and my hon. Friend is continuing.

Housing Need (London)

Mr. Dubs: asked the Secretary of State for the Environment what is his assessment of unmet housing need in inner London.

The Parliamentary Under-Secretary of State for the Environment (Sir George Young): The assessment of housing need is primarily a matter for the local authorities concerned. The Government's assessment is based on the generalised needs index, which is discussed each year with the local authority associations, supplemented by information provided by the inner London boroughs and the GLC in their annual housing investment programme bids.

Mr. Dubs: When will the Minister accept that there is a desperate housing shortage, particularly in inner London, but also in other parts of the country? When will he accept that the shortage means that families with young children are trapped in tower blocks, that families which ought to be given transfers on medical grounds have no way of getting out and that it is offensive to such badly housed families that local authorities such as the Conservative London borough of Wandsworth should have sold empty council houses, which are standing empty again as the buyers try to sell them and make a profit?

Sir George Young: The HIP allocation for the London borough of Wandsworth was increased by 5 per cent. this year, and only two boroughs received a higher proportionate increase. The number of improvement grants in the borough increased from 423 in 1981–82 to 2,500 last year and the borough has received £65 million from the sale of council houses. I hope the hon. Gentleman recognises that the sale of council houses has generated additional resources for hard-pressed boroughs such as Wandsworth.

Mr. Couchman: Is my hon. Friend aware that large sums are being paid by the DHSS to recipients of unemployment benefit and social security to make mortgage interest repayments and that those sums are being suborned because they are being paid direct to the claimants rather than to the building societies?

Mr. Speaker: Order. The question on the Order Paper refers to housing need in inner London.

Mr. Couchman: I should like to relate the question to housing needs, Mr. Speaker.

Mr. Speaker: Order. I am sorry, but the question must be related to inner London.

Mr. Simon Hughes: Can the Under-Secretary tell us what positive steps the Government are taking to deal with the amount of empty property in inner London—not only public but private—particularly as the problem is affected by the legislation introduced earlier this Session? What are they doing about the severe problem caused by the fact that whereas 70 per cent. of Londoners earn £9,000 a year or less, the average price of a one or two-bedroomed property is now £30,000 or more? Many people are not able to exercise the right to buy, and many young Londoners are being forced out of inner London if they want to live in their own homes.

Sir George Young: The hon. Gentleman rightly draws attention to the fact that on 1 April this year over 31,000 dwellings owned by the public sector in London were empty. My Department has initiated a series of meetings with the 30 worst offenders, and we hope to announce the results of that exercise quite soon and to take further initiatives. The recent increase in discounts brought in by the Housing and Building Control Act 1984 will, I hope, bring within the reach of more people in London the opportunity of home ownership.

Mr. John Fraser: Will the Minister admit that inner London has an acute housing problem? Will he undertake that there will be no cuts in the housing investment programmes for the inner London boroughs in the review of housing investment for next year, which the Department must now be undertaking?

Sir George Young: On the question of public sector investment, I draw the hon. Gentleman's attention to an excellent article today in The Guardian, which I am sure he reads. The heading is:
In the beginning was the council estate".
I shall quote some words from the article.
It is the total dependance on the public sector which has created the problem in the first place … We have got to involve the private sector in the solution.
Those words were uttered by the Labour leader of Knowsley borough council.

Local Authorities (Borrowing Requirement)

Mr. Norman Atkinson: asked the Secretary of State for the Environment if he intends to extend his restrictions on the borrowing requirement of local authorities to those private companies now contracting for local authority work.

Mr. Kenneth Baker: My right hon. Friend the Secretary of State announced on 26 September that in the light of the latest figures the present restraint on local authority capital expeniture would have to continue. This leaves authorities free to place new contracts within certain limits. We are asking authorities which have entered into commitments up to or beyond those limits not to let further contracts, to the private sector or otherwise, but there is no question of any authority having to withdraw from existing contracts.

Mr. Atkinson: Does the Minister recollect a circular issued by his Department advising local authorities that investment in contractors' plant and machinery is inflationary and therefore should be cut? Why then is investment in contractors' plant and machinery in private undertakings deflationary?

Mr. Baker: If I may say so without appearing discourteous, the hon. Gentleman has got hold of the wrong end of the stick. If a local authority wishes to let a capital contract, it can do so either to the private sector or to its own direct labour organisation. The direct labour organisation is, of course, free to compete for the contract.

Peterlee Development Corporation

Mr. Dormand: asked the Secretary of State for the Environment if he will convene a meeting of interested bodies to discuss the future of Peterlee development corporation.

Sir George Young: No, Sir. My right hon. Friend held such a meeting on 1 August in connection with the future of Aycliffe, Peterlee and Washington development corporations and is now considering his decision on the future of these three new towns. In addition, my noble Friend Lord Bellwin visited the area in July of this year.

Mr. Dormand: That is not quite correct. The meeting did not include everyone who was interested in the Peterlee development corporation. If the Minister were to convene such a meeting, he would find that every organisation is completely opposed to the proposal to abolish the development corporation next year. Does the Minister not appreciate that to abolish the only job-finding agency in an area where unemployment is approaching 20 per cent. would be an act of the utmost folly? Why should that body be abolished when it has attracted 6,000 new jobs to the area in recent years?

Sir George Young: I recognise that in the responses to our consultation document there was virtually unanimous support in the region for the continuation of the development corporations. Ministers were impressed by the degree of support that the development corporations have generated while they have been in being. On his last point, I ask the hon. Gentleman to be patient for a little while longer. My right hon. Friend must consider the issues raised during consultation, but we hope to reach a decision very soon.

Mr. Proctor: Will my hon. Friend make it his policy to wind up development corporations in Peterlee and elsewhere as quickly as is practicable?

Sir George Young: The Government's policy is to bring to an end the life of the development corporations when they have completed the tasks set out for them.

Mr. Boyes: Does the Minister not agree that the wind-up of the Peterlee, Aycliffe and Washington development corporations, when unemployment in the north of England is at a record level, would be an absolute disaster? The Minister said that he would give an answer as soon as possible. Does he not remember that interested parties from Aycliffe and Washington met him before the recess, when it was implied that the result of the discussions would be given to them before Parliament reconvened? We have not yet been told of the decision, and that is causing many people great anxiety. When will he tell us?

Sir George Young: I recognise the need to reach a decision soon, and I hope that we can do so in the very near future. I can confirm that the continuing high level of unemployment in the northeast was a reason put forward for the continuation of the corporations. Ministers will certainly take that into account.

Dr. Cunningham: Does the Minister not recognise that to abolish the new town corporations in the northern region would be a hammer blow? Has not that area recently been further damaged by losses of jobs in the shipyards on Tyneside? Does the hon. Gentleman not recognise the role played by the Washington development corporation, together with local authorities, in bringing Nissan to the northern region? That is the sort of point that we w ant him to take on board. It would be devastating for the region if it lost those development corporations.

Sir George Young: If we had pursued the wind-up dates set down by the Opposition, one of those development corporations would already have ceased to exist.

Wildlife and Landscape (Safeguards)

Mr. John Hunt: asked the Secretary of State for the Environment if he is satisfied with safeguards that exist for wildlife and landscape in those areas which have no designation under the Wildlife and Countryside Act 1981; and if he will make a statement.

Mr. Waldegrave: Yes, Sir, I am satisfied in general. All local planning authorities, including London borough councils, have power under section 39 of the Act to enter into management agreements for the purposes of conserving or enhancing the natural beauty or amenity of the countryside or for promoting its enjoyment by the public.

Mr. Hunt: Is my hon. Friend aware that during the summer extensive tree felling and scrub clearance was carried out by a thoughtless farmer in Mollards Wood, causing great annoyance and anxiety to a large number of residents? Would it not be simple and entirely reasonable in such circumstances to require a farmer to give six months' notice of his intention to carry out any work that might alter the landscape or affect the wildlife? Why cannot that be done?

Mr. Waldegrave: As my hon. Friend knows, the Forestry Commission is still pursuing the question whether the felling licence was complied with, which may be relevent here. Although there are powers relating to the areas that have been designated, especially by the Nature Conservancy Council, as ecologically important, my hon. Friend is asking for a very wide extension of those powers over the remainder of the countryside, which would be difficult.

Mr. Andrew F. Bennett: Does the Minister appreciate that there is widespread concern that the Wildlife and. Countryside Act 1981 is not having the intended effect — as many people warned when it went through Parliament? Will the hon. Gentleman have special concern for the provision of marine nature reserves, which were a matter of some argument during the passage of the Bill, and which the Government appear to be ignoring?

Mr. Waldegrave: There is widespread support for the Act. A positive new consensus has began to emerge on


countryside management, and the Act has played an important part in that. The marine nature reserves are not a matter for the Government in the first instance. The two cases that have been pursued have both run into complex difficulties. However, I am keeping an eye on the position.

Mr. Kenneth Carlisle: Does my hon. Friend accept that unneccessary drainage to add to agricultural surpluses has had a major impact on wildlife in the countryside? Will he have a word with his right hon. Friend the Minister of Agriculture, Fisheries and Food about the review of drainage which is now long overdue, and should be forthcoming? Should not that review make large drainage schemes subject to scrutiny?

Mr. Waldegrave: My Department has been closely involved with the Minister of Agriculture, Fisheries and Food about the review. My right hon. Friend the Minister will publish a discussion document shortly.

Dr. David Clark: Does the Minister appreciate that parts of the Act have turned our countryside into disaster areas? Does he not recall the repeated offers from the Labour Opposition to assist the Government with remedial legislation? Why has he not acted on that offer? Will he tell the House of his plans to preserve parts of the countryside?

Mr. Waldegrave: The hon. Gentleman is wrong to blame the Wildlife and Countryside Act. If the Act had not been there, the damage would have been greater. However, I accept his point that it is necessary to make improvements to the Act. I am grateful for his offer of help, which we may shortly take up.

Foreign Affairs Council

The Secretary of State for Foreign and Commonwealth Affairs (Sir Geoffrey Howe): With permission, Mr. Speaker, I should like to make a statement about the Foreign Affairs Council which I attended in Luxembourg on 22–23 October, and on the main developments in the Community during the recess.
I am arranging for a note on the other issues discussed at this, and other, Councils during the recess to be published in the Official Report.
Considerable progress was made in the negotiations on the accession of Spain and Portugal. Community positions were agreed and communicated to the Spanish and Portuguese Foreign Ministers on a number of matters including olive oil, where a position designed to prevent the development of a surplus was adopted; and to the Spanish Foreign Minister on industrial tariffs, where the Community's position provides for the more rapid reduction of high Spanish tariffs and an extended reduced duty quota for cars. The Council adopted a declaration noting that agreement had been reached on most of the main issues in the negotiations with Portugal and looking forward to the accession of both countries to the Community on 1 January 1986.
In addition to the ministerial meetings held with Spain and Portugal, there was a meeting of the European Community-Jordan co-operation council. In the Council, I made clear our concern at the Commission's latest scheme for sales of intervention butter and in particular whether this was compatible with the Community's obligations under the GATT.
More generally, considerable progress has been made in the Council towards implementing the Fontainebleau agreement and resolving the outstanding budget issues. The Foreign Affairs Council on 2–3 October adopted the 1985 provisional draft budget within the 1 per cent. VAT ceiling and sent it forward to the European Parliament. Agreement was also reached to provide 1,000 million ecu of supplementary finance through an intergovernmental agreement to cover the Community's inescapable financial obligations for 1984. The Council noted that our willingness to participate in that agreement would depend on the release by the European Parliament of the United Kingdom's refunds for 1983 and agreement on the measures necessary to guarantee the effective implementation of the principles of budget discipline agreed with the European Council. The Council has reaffirmed the commitment of the European Council that the 1,000 million ecu abatement of our contribution in respect of 1984 will be made on the revenue side of the budget in 1985.
Substantial agreement on a satisfactory text about budget discipline was reached at the ECOFIN Council on 1 October. The Irish presidency is now conducting further consultations with a view to reaching final agreement at an early meeting of the Council.
On 10 October the European Parliament voted to release the United Kingdom's refunds, amounting to about £440 million net. Ninety per cent. of the gross refund, that is, £528 million, is due to be paid to the United Kingdom during the next few days.

Following is the report on other issues:
There were three meetings of the Foreign Affairs Council during the summer recess. That on 2–3 September, at which my

hon. Friend the Member for Edinburgh, Pentlands (Mr. Rifkind), the Minister of State, represented the United Kingdom, dealt exclusively with the negotiations for Portuguese and Spanish accession which I covered in my statement to the House earlier today. At the other two Councils, on 17–18 September and 2–3 October, I represented the United Kingdom accompanied by my right hon. Friend the Minister for Overseas Development. My right hon. Friend the Minister for Trade was present at the 17–18 September meeting. My right hon. Friend the Minister for Overseas Development attended the 2–3 October meeting.
At both Councils, Ministers discussed the negotiations en a successor to the second Lomé convention, in preparation for the EC-ACP ministerial negotiating conference which was subsequently held in Brussels from 9–12 October. Negotiations between the Community and the ACP countries are continuing.
The 17–18 September Council adopted the regulation on the strengthening of the common commercial policy. This improves the Community's ability to respond to illicit trading practices by third countries, in a manner consistent with the Community's existing international obligations. The Council also adopted the long-delayed package of 15 directives laying down common standards for a range of industrial products. Her Majesty's Government welcome this useful step in opening up the internal market.
At the September meeting, we drew attention to the need for a further supplement to the 1984 duty-free newsprint quota sufficient to meet the requirements of Community users to the end of the year. This has now been agreed. There was also discussion of Portuguese demands for greater access this year for her textile exports. The Commission stressed the urgency of a new agreement with Portugal. The Council considered the problem of the famine in sub-Saharan Africa, especially Ethiopia. The Commission reported on what the Community has already done to help and undertook to assess what further action was required. As my hon. Friend the Minister for Overseas Development told the House on 22 October, the Community subsequently agreed to ship a further 35,000 tonnes of wheat to Ethiopia.
The 2–3 October Foreign Affairs Council agreed a strongly worded declaration, emphasising the Community's concern at the protectionist provisions in the Omnibus Trade Bill before the United States Congress and the potentially serious consequences were they to be adopted. Many of the more objectionable provisions were eliminated or modified in the final version of the Bill.
On 22–23 October, the Council approved the transfer of £37·8 million from the general budget of the Communities to the European Coal and Steel Community in order to finance social measures to accompany restructuring of the steel industry. This follows previous allocations for this purpose in 1981–83 amounting to £127 million. The United Kingdom is a net beneficiary from the programme of social measures in the steel industry. The Council confirmed the Commission's negotiating mandate for the 1985 voluntary restraint arrangements with major third country suppliers under the external steel regime. Ministers also agreed that accelerated Tokyo round tariff cuts should be implemented on 1 January 1985 for a number of products of interest to developing countries.

Mr. Robin Cook: The Foreign Secretary concluded by referring to the payment at long last of the 1983 refund. Will he confirm that the reason why the rebate has been paid is that the Government have surrendered to the condition imposed by the European Parliament when it blocked the rebate in July, in that they have submitted to a whip-round of further additional expenditure in the 1984 budget? Does he agree that that is in flat contradiction of every reassurance we heard from Ministers before the recess that the 1984 budget could be balanced by effective control of expenditure? Is it not true that we have obtained our rebate by agreeing to hand back a large chunk of it in order to pay for the rebate that we are receiving?
Will the Foreign Secretary confirm, as the House was in recess when that loan was agreed to, that it requires the specific approval of Parliament? Will he note that some of us, when we are invited to give that approval, may take


the view that it is an odd way of enforcing discipline in the Common Market to offer Brussels even more money to spend?
The Foreign Secretary also referred to the progress on budget discipline. Is he aware that the text that is under discussion falls well short of the demands made by the British Government and has been characterised by his German opposite number as a package of indiscipline? Will he confirm that the text will not be legally binding, will operate on the basis of majority voting and will be suspended in any year in which there are "abnormal circumstances"—which covers just about every year in the history of the CAP?
Why, in those circumstances, has the Foreign Secretary reportedly agreed that the increase in own resources should be brought even further forward, to October 1985? Does he not realise that his enthusiasm for an early increase in payment to Brussels is not shared on both sides of the House, which will certainly wish an early opportunity to express its view on the negotiations that have been conducted in its name for so many months?

Sir Geoffrey Howe: On the first question raised by the hon. Gentleman, we made it clear throughout that we were prepared to consider financing the inescapable obligations of the Community once all possible savings had been found and provided that the other issues were resolved. The House will recall that the threatened budget overrun for 1984 was 2·3 billion ecu; that has been reduced as a result of the negotiations during the summer to less than half that figure—to 1 billion ecu—and we agreed to contribute our share of the financing of that residual sum provided that the 1983 refund was released, as it has been, by the European Parliament and provided that agreement is reached on budget discipline in the text implementing the European Council's resolutions.
Of course, we made it clear in the negotiations that Parliament must approve the supplementary finance to which I referred under the intergovernmental agreement.

Mr. Robin Cook: When?

Sir Geoffrey Howe: At the appropriate time.
It is plain from what I have already told the House that the achievement of a satisfactory text on budget discipline was a condition still attached to our willingness to consider an intergovernmental agreement. We have made it clear throughout—the matter is still under discussion—that the text must implement the Fontainebleau conclusions, which stipulate that the council must adopt measures to guarantee the effective application of budget discipline. That is the objective which we set ourselves.
Parliament will have an opportunity to debate the date of implementation of or own resources. That will not arise until the conclusion of the enlargement negotiations; it may then be appropriate for the commencement of implementation to come into the latter part of next year.

Mr. Terence Higgins: The Foreign Secretary referred to an intergovernmental agreement covering the Community's inescapable financial

obligations for 1984. What are those inescapable obligations, and would they be inescapable if no finance were forthcoming to cover them? Will my right hon. and learned Friend make it clear whether the supplementary finance is an increase in the overall resources of the Community that it would otherwise not have had, or whether it is a loan?

Sir Geoffrey Howe: On the first point, the commitments to which I referred, which represent about 1,000 million ecu, include a variety of components that are truly inescapable as a result of the commitments already entered into by the Community. The achievement has been to secure a substantial reduction from 2·3 billion to about 1 billion. We must face the fact that the Community, with all its member states participating in it, has been running and financing an agricultural policy that has threatened to take those figures much higher. The whole process of coping with that, checking that growth and getting it under the discipline that we want is bound to take some time. The 1985 draft provisional budget, as I said, has been adopted within the framework of the 1 per cent. VAT ceiling. We believe that it is important to stay within that framework, and for that purpose to consider advancing the implementation date into 1985.

Mr. Russell Johnston: Has there been discussion in Council on the argument about whether aircraft to be supplied to the Caribbean should be British or Franco-Italian? As the right hon. and learned Gentleman knows, rightly or wrongly the French Commissioner has come under criticism on that matter. That underlines the importance of the independence of the Commission. Given that, and the recent appointment of Commissioners, it would be of value for the House to know what criteria Her Majesty's Government used in appointing our new Commissioners.

Sir Geoffrey Howe: On the first point, there has been discussion in the Community about the supply of aircraft to the Caribbean, which is of interest, rightly, to the hon. Gentleman. It has been canvassed recently by my right hon. Friend the Minister for Overseas Development who has just returned from the Caribbean. No conclusion has yet been reached although plainly we should prefer British aircraft. Our criteria for the appointment of Commissioners have been to appoint people with wide European ministerial experience with high reputations, who are wholly suited for the appointments that have been made.

Mr. Eric Forth (Mid-Worcestershire): Although my right hon. and learned Friend has confirmed that the proposed budget for 1985 will be within the 1 per cent. ceiling, which I am sure we all welcome, can he give the House an assurance that Her Majesty's Government will stoutly resist any attempts to go above that ceiling, and will he further resist any attempts to introduce supplementary budgets during 1985 to breach that ceiling, because otherwise it would be meaningless?

Sir Geoffrey Howe: I understand my hon. Friend's anxiety, but I return to the point that we are engaged in stopping a programme that has been rolling forward at


considerable speed. It is for that reason that we have had to struggle so hard to reduce the overrun in 1984. The same principle has been adopted for 1985. I should not, however, wish to suggest that it will be possible to finance all the 1985 expenditure within the provisional draft budget so far adopted. It is important for us to maintain the strongest possible hold on that in all the European institutions which is one reason why we attach importance to the achievement of budget discipline.

Mr. Eric Deakins: What is the latest form of words relating the "budget discipline"? If the Foreign Secretary is unable or unwilling to give the House that important information can he tell us what is the British Government's desired text or form of words to cover that important point?

Sir Geoffrey Howe: The question cannot be answered with the brevity that is appropriate for an answer on the Floor of the House. The budget discipline text has been under discussion first by the Finance Council and, subsequently, by the Foreign Affairs Council. It contains a number of paragraphs, and several of those paragraphs are still under negotiation to ensure that it effectively guarantees the principles of budget discipline agreed by the European Council. I cannot attempt to encapsulate the current argument in any one phrase or text.

Mr. Teddy Taylor: Although we shall no doubt discuss the budget on many occasions, in view of the Secretary of State's known profound anxiety about the plight of the starving people in Ethiopia, can he say whether he was successful yesterday in persuading his colleagues to take further emergency measures to deal with that grave crisis?

Sir Geoffrey Howe: I have not secured—indeed, yesterday there was no particular discussion of this matter—any position in the Community on this. I appreciate fully the extent to which on Monday the House expressed its feelings on the subject and the anxiety with which it is regarded throughout the country. The Ethiopian problem is only one aspect, although it is a tragic—

Mr. George Foulkes: And urgent.

Sir Geoffrey Howe: —and urgent one, of the general problem of drought and famine in Africa and elsewhere. One hardly meets anyone from that continent without having the problem drawn to one's attention. We propose, therefore, to make a further major contribution. I have directed that the balance of our national food aid allocated for this year — that is, over 6,000 tonnes — is made available for Ethiopia. I am grateful to my right hon. Friend the Minister for Overseas Development for the speed with which he has addressed himself to this matter on his return. In addition, we shall provide a further £5 million in drought-related assistance to Ethiopia and other African countries. We shall also be urging upon our colleagues in Europe the need for further substantial contributions from the emergency provisons of the European Development Fund and this year's Community food aid programme.
I must warn the House of one matter that was pointed out on Monday. It concerns the very real difficulties in getting help to those who really need it. We shall have to apply ourselves to that as well.

Mr. Roy Jenkins: Will the right hon. and learned Gentleman recognise fully the great importance of ensuring that there is no further slippage beyond 1 January 1986 on the date for the admission of Spain and Portugal? We are already four years behind the date that was being discussed. Were there to be a further slippage it would be extremely damaging — [HON. MEMBERS: "Why?"] It would be damaging for relations with Spain and Portugal, which have been kept waiting too long. They are new democracies, and it is very important to bring them into the Community. Will the right hon. and learned Gentleman use his best endeavours to ensure that there is no repetition of what happened at the Council at the end of September, when the Spaniards were treated in a dilatory and discourteous manner?

Sir Geoffrey Howe: The right hon. Gentleman is right to draw attention to this. We were very conscious of the point when we met the Spanish Foreign Minister in Luxembourg on Monday. It was one reason why we were so anxious to achieve the progress that we made.
The House should bear in mind that it is important that we conclude these negotiations. First, it is a matter of concern to the United Kingdom that the stability of democratic systems of government in the Iberian peninsula is helped and not diminished. It is also important to the British people that access to the highly protected industrial markets of Spain should become available to our industrial manufacturers.

Mr. Nicholas Winterton: You must be joking.

Sir Geoffrey Howe: I am perfectly prepared to answer a proper question from my hon. Friend in due course.

Mr. Winterton: You will get one.

Sir Geoffrey Howe: Even that would not surprise me.
Therefore, I take account of the importance of the date of 1 January 1986. Clearly it is important not to treat that as though it were the Greek kalends.

Mr. Jim Spicer: I am sure that the House will agree with my right hon. and learned Friend that the famine relief measures that have to be taken by the Community are urgent and desperately required not only in Ethiopia but throughout Africa. However, the main problem is not the supply. The simplistic view is that supplies can just go forward, and that is the end of the matter, because they will arrive at their destination. However, it is a logistical problem. Is there no way in which the European Community can set up a standing logistical force, along the lines of NATO's disaster force, which could swing into action in emergencies? Would not it be right for the United Kingdom Government to put forward plans for such a force to be established?

Sir Geoffrey Howe: I am grateful to my hon. Friend for coming back to that. I drew attention to it in my original answer, and my hon. Friend was right to underline it. We have to be concerned not just about the gross volume of aid but about whether it is reaching the intended recipients. The Community has an emergency provision for its own development fund, but that does not ensure delivery. I do not think that I can say more to comfort my hon. Friend beyond stressing that this is a matter to which we shall direct the Community's attention as closely and as energetically as possible. My impression of the scene on the ground is that it is extremely difficult for even the best intentioned people to be sure of putting together what is necessary. But I shall take careful account of my hon. Friend's comments.

Mr. Bryan Gould: When and how shall we know, and according to what criteria shall we be able to judge, whether the condition on budgetary discipline has been met?

Sir Geoffrey Howe: The criteria necessary will be for the hon. Gentleman, along with others, to consider the text that we finally commend to the House alongside the objectives stated in the Fontainebleau conclusions to see whether they are effective to guarantee the delivery of what is intended. That will arise when the wider issue comes before the House.

Mr. David Harris: Were fisheries featured in the talks, bearing in mind the huge size of the Spanish deep water fleet and the impact that it is likely to have on Britain's fisheries? Will my right hon. and learned Friend make available to his colleagues in the Council of Foreign Ministers the horrific films that are now being shown on BBC television about the state of famine in Ethiopia?

Sir Geoffrey Howe: I agree with my hon. Friend that the films serve to bring home dramatically the dreadful conditions in Ethiopia about which we are concerned. It is my impression that the same sort of presentation is being made in other countries. My hon. Friend need not fear that we shall fail to underline the importance of the matter.
We spent a substantial time yesterday discussing a possible fisheries mandate for the enlargement negotiations. We have not come close to a conclusion. It is an extremely important matter for the British fishing industry and for at least four other member states which have substantial fishing fleets. The size of the Spanish fishing fleet is a matter of real concern.
The problem of establishing a sensible policy for the conservation of fish while allowing the fishing industry to continue to operate in those conditions is one that has not been created by the Community. The problem has been created by the conditions and the danger of over-fishing is one with which Europe would have to cope, Community or not. This is a difficult matter but we are determined that we shall achieve a proper decision for the negotiations to go ahead.

Mr. Tam Dalyell: If the Foreign Secretary, perhaps understandably, has not been briefed on the Caribbean aircraft order, perhaps he will make arrangements for the Minister for Overseas Development,

who clearly knows about it, to make a statement. The House is concerned. It seems that my old friend and colleague in the European Parliament, Mr. Pisani, has manipulated the order for the benefit of France and to the disadvantage of Britain. If that is an unfair assessment, we should be told. I think that we should be told today by some parliamentary method.

Sir Geoffrey Howe: The hon. Gentleman is rightly renowned for his tenacity and he is entitled to return to this issue with me. I cannot give the House the detail on this, but it is a matter—

Mr. Foulkes: I wrote to the Secretary of State last week about it.

Sir Geoffrey Howe: The matter has been advancing and my right hon. Friend the Minister for Overseas Development has been considering it also. As the hon. Member for Linlithgow (Mr. Dalyell) knows, recommendations were made for the French aircraft by, I think, a German consultant. A strong view has been expressed in the opposite sense by many of the Caribbean countries and that is something that we are not overlooking. I cannot announce a conclusion on this matter now. I fully understand the desperate anxiety of Labour Members and my right hon. and hon. Friends and my right hon. Friend the Minister for Overseas Development will ensure that the hon. Gentleman—[HON. MEMBERS: "The House."]— has the up-to-date information that is available.

Mr. Albert McQuarrie: rose—

Mr. Dalyell: On a point of order, Mr. Speaker. Is there no parliamentary mechanism by which a Minister, who obviously knows about details, can answer a quesion in the place of one who, understandably perhaps, does not?

Mr. Speaker: That is not a matter for me.

Mr. McQuarrie: When my right hon. and learned Friend was with the Spanish Foreign Minister, did he discuss with him whether the Lisbon agreement, which was signed on 10 April 1980, would be implemented? Did he say to the Spanish Foreign Minister that there is no question of Spain being allowed to enter the EC so long as the restrictions on the border between Gibraltar and Spain continue, against Gibraltarians and British citizens?

Sir Geoffrey Howe: My hon. Friend is, rightly, continuously astute on this issue. I have discussed the matter on a number of occasions with the Spanish Foreign Minister. The importance of the Lisbon declaration is clearly understood, as is the constitutional position of the people of Gibraltar as set out in the Gibraltar constitution. It has been made clear, and is clearly understood, that there can be no question of accession taking place alongside the continuation of the border restrictions to which my hon. Friend has referred.

Mr. Allan Roberts: Does the Secretary of State understand that there can be no confidence in the arrangements that he says have been agreed to prevent the


creation of an olive oil lake when Spain joins the Common Market while a wine lake exists and the Common Market continues to store and then destroy the obscene butter and beef mountains? Why is olive oil different from wine? If the right hon. and learned Gentleman can make those arrangements for olive oil, why can he not make them for wine and the other goods?

Sir Geoffrey Howe: The answer is simple—it has taken a substantial amount of time to secure sufficiently wide insight, not just throughout the Community but in our country, about the importance of curbing the size of food surpluses, whether of cereals, butter, milk or wine. The wine surplus already exists, and we must address ourselves to that matter. That is one of the issues still outstanding in the negotiations for the Spanish and Portuguese accession. There is not yet an olive oil surplus problem in the existing Community. It is perceived that there will be such a problem on enlargement of the Community. We are taking measures that will prevent the problem developing. I am surprised that the hon. Gentleman is dismayed at that. Surely, that is a substantial achievement. The hon. Gentleman should not allow the best to be the enemy of the good.

Mr. Roberts: I do not believe it.

Mr. Nigel Forman: Does the prospect of the enlargement of the Community to include Spain and Portugal herald a greater European interest in the problems of central America? Have the Government been turning their attention to supporting and broadening the efforts of the Americans in that area?

Sir Geoffrey Howe: I think that Community and European countries already have a substantial interest in the problems of central America. For that reason, during the recess I went with Community Foreign Ministers to the conference in Costa Rica of central American countries. The fact that we were accompanied to that conference by the Spanish and Portuguese Foreign Ministers shows that the enlarged Community is likely to take an even closer interest in that region.

Mr. Andrew Faulds: In view of the terms of the right hon. and learned Gentleman's statement, is it not time that the Council and the Governments concerned abandoned their preoccupation with these pettifogging domestic economic matters and started to assert a more overtly political view of Europe's interests, to offset American and Soviet pressure and power?

Sir Geoffrey Howe: I am delighted to set out the wider horizons that commend themselves to the hon. Gentleman. As we have made clear on many occasions, it is important for the Community to develop an increasingly effective voice on foreign policy questions that affect member states generally. That was one of the reasons why it was so important to make headway on those substantial, longstanding questions that were the subject of the Fontainebleau conclusion. I am grateful to the hon. Gentleman for his support of the idea of increasing the effect of political co-operation.

Mr. Nicholas Winterton: Is my right hon. and learned Friend aware that his statement will not be universally welcomed by Conservative Members, bearing in mind that the British farmer has been used as a sacrificial lamb on the altar of the European budget and that British Aerospace has been unjustly deprived of an order from the Leeward Islands for three 748s because of the intrigues of the French Commissioner? Is my right hon. and learned Friend aware that the accession of Spain and Portugal could lead to a grotesque increase in unemployment in Britain? Is that in the best interests of this country? I think not.

Sir Geoffrey Howe: I have no doubt that if the world appeared as simple and as gloomy to all of us as it appears to my hon. Friend we should take a different view.

Mr. Winterton: But that is the reality; I wish you would come down to it.

Sir Geoffrey Howe: I gave my hon. Friend an opportunity to come in, and he has made his point with his customary lucidity. The changes that are taking place in the common agricultural policy were intended to occur and are occurring throughout the Community. Of course the changes involve hardship, change and sacrifice for farmers of different kinds, but they are inevitable. It is not accurate to conclude that the enlargement of the Community with the accession of Spain offers the prospect of nothing but mass unemployment. Accession offers the prospect of large and increasingly free access to the Spanish market which, so far, has been entirely protected. That is good, not bad, for employment in this country.

Mr. Winterton: What about the 748s and the Leeward Islands?

Mrs. Ann Clwyd: Despite all the Government's talk during the past year, the reality is that the 1985 draft budget allocates 71 per cent. of its spending to farming, only 5 per cent. to social policies and only 6 per cent. to regional policies. How do the Government intend to reallocate that spending in the Community budget? Over the last five years in the European Parliament there has been enough talk about, and enough crocodile tears have been spilt, over the problems of unemployment, but there has been no reallocation of that sector of the budget to help alleviate the problem.

Sir Geoffrey Howe: The hon. Lady is right to draw attention to this point. For precisely that reason we are seeking to secure strict and effective budget disciplines, including a component which ensures that agricultural expenditure grows less rapidly than the growth of own resources. It is important to achieve that. I also ask the hon. Lady to support the view that we can achieve the headway that we desire not only by the reallocation of a necessarily constrained public expenditure but by working for increasing liberalisation of the entire Community market. That is another feature to which we attach the greatest importance.

Mr. Tony Baldry: Everyone will welcome the prompt way in which the Government have responded to the famine in Ethiopia by allocating further funds and food, but the dimensions of this disaster are such that it requires a co-ordinated international response. Will my right hon. and learned Friend therefore please ensure that this item not only stays high on the agenda of the Council of Ministers but that it is made clear that Europe, having done its part, looks to the rest of the international community — in particular the Soviet bloc and the middle east—to play its part in alleviating this crisis?

Sir Geoffrey Howe: My hon. Friend is quite right. This is not just a question of the production of money; it is also a question organisation. The Community has, and must keep, the organisational point well in its sights, and so must the World Food Programme. My hon. Friend was also entirely right on this as on many other occasions to draw attention to the total failure of any significant contribution to problems of this king by the Soviet Union. It is important for that point to be underlined.

Mr. Tony Marlow: Could my right hon. and learned Friend help people like myself who very much wish to help him? How can we convince our constituents that we should take more taxes from them so that Parliament can then surrender its control over that money to an institution which is currently spending £100 million a week on the destruction and dumping of food?

Sir Geoffrey Howe: There are two aspects to that question. First, not just in the Community but in virtually every developed country with a substantial problem of agricultural overproduction, one will find examples of money being misdirected to the disposal of surpluses, to the exclusion of land from farming. This problem besets all societies such as our own, which must try to secure a proper balance between agricultural living standards and those of the industrial community. It is important for us to put in place, as we are now doing, precisely those measures which will achieve that.
As to the change in resources, we must also recognise that one of the substantial achievements of Fontainebleau was a substantial reduction in the net burden that will fall on the people of this country. There will be a substantial reduction in the share which hereafter we shall pay towards the cost of any Community programmes.

Mr. David Young: Are not the Government illogical and insincere in supporting the accession of Spain while that country supports border restrictions with Gibraltar and consistently makes claims on the people and land area of that territory? Will the right hon. and learned Gentleman recognise that land cannot be equated with people's futures? Before that accession takes place, will he make it absolutely clear that this matter must be resolved and that we cannot support another EEC Member which at the outset is demanding that people who have the right of British citizenship should join Spain.

Sir Geoffrey Howe: The hon. Gentleman is right to draw attention to the importance that we attach to this subject. As I have already said, accession of another member state alongside the continuance of frontier controls of the kind which presently exist would be quite inconsistent and unacceptable. The preamble to the Gibraltar constitution makes it plain that no change in its status can take place without proper attention being paid

to the wishes of the people. It is interesting and important to notice that the Spanish Foreign Minister has on more than one occasion emphasised his understanding of the importance of the wishes of the people and his recognition of the fact that no change can take place against their will.

Mr. Frank Cook: On more than one occasion today the right hon. and learned Gentleman has referred to principle and justification. Will he square with the House his apparent willingness to engage in cap-passing exercises to make up for the overspend on budgets and the cynical insistence of his colleagues to limit expenditure for his own countrymen?

Sir Geoffrey Howe: The nature of that question is either so broad-ranging or so arcane that I find it difficult to understand. We have achieved a substantial advance in the implementation of tight budget discipline, a very substantial reduction in the budgetary prospects for the current year and a provisional budget for next year within the 1 per cent. ceiling. If the hon. Gentleman has any further suggestions to make, I am always prepared to listen to them.

Mr. Cook: Resign.

Mr. Robert Jackson: Further to the question of the hon. Member for Cynon Valley (Mrs. Clwyd) about the balance between agriculture and non-agriculture in the European budget, is my right hon. and learned Friend aware that if the formula for budgetary discipline provides that agricultural expenditure shall grow no faster than the increase in own resources, and that non-obligatory expenditure shall stay strictly within the maximum rate, that will be a cast-iron formula for guaranteeing that there will be no changes in the balance of the budget between agriculture and other types of expenditure?

Sir Geoffrey Howe: It depends, does it not, on how far within the fixed percentage it stays? I fully appreciate my hon. Friend's point that that in itself will not be enough, but in recent times the problem has been to prevent agricultural expenditure consuming a growing part of total resources. It is important to put in place the two components of overall budget discipline and an obligation to secure a lower than natural own resources growth of the rest.

Mr. Robin Cook: Will the Foreign Secretary accept that the answer to the question from my namesake is that it is indeed perverse for this Government to be cutting all forms of domestic expenditure while at the same time proposing an increase in European expenditure on the CAP? That happens to be the one area where there is a consensus that there should be a cut rather than an increase in expenditure.
The whole House will accept the right hon. and learned Gentleman's sincerity and concern about Ethiopia and will echo his words. However, I am sure he will accept that many people find it offensive—I do not think that that is too strong a word—that at a time when Europe is sitting on a massive grain harvest the institutions of Europe should have been so slow in agreeing to release intervention stocks for that urgent famine.
As to the Caribbean aircraft, I press the Foreign Secretary to show some real concern over the issue at stake. Is he not aware that what is required is not more or


up-to-date information but an accurate expression of concern by the Government through whatever channel is available to them?
I wish to express alarm over one of the responses which the right hon. and learned Gentleman made to my initial questions. He stated that the vote in this House on own resources would be taken after negotiations on enlargement were concluded. Will he confirm that there is no end in sight to those negotiations? Does he not accept that it would be grossly unfair to the House if he were to continue to enter into further agreements on the presumption that at some future stage the House will agree to the increase in own resources? Would it not be wise to put this matter before the House before he commits Britain even further in negotiation?

Sir Geoffrey Howe: On that last point, it has been plain throughout, and is plain from the text of the Fontainebleau conclusions, that any increase in own resources would have to be embodied in an own resources decision, and that that own resources decision is subject to ratification by the parliamentary procedures of each of the 10 member states. When the Commission makes its proposal in an appropriate text, it will be subject to parliamentary scrutiny in each country in the usual way. It is plain from the text that only unanimous concurrence among Parliaments can lead to that conclusion.
On the hon. Gentleman's other point, we cannot simply dismiss Community expenditure on agriculture policy as though it had nothing whatever to do with us. If we were not part of a common agriculture policy, we would be part — as we have been — of an entirely different national agriculture policy, contending with competing protected agriculture regimes outside. It is idle to pretend that that would lead to a more comfortable conclusion. In the context of that framework it is necessary to work together to secure the necessary reduction.
The hon. Gentleman mentioned Ethiopia, which I hope is a matter of less contention between us. I fully share his concern as, indeed, does the whole House. The response that I announced today is substantial. The Community has already been making very substantial sums of food aid available. However, it is right that we should pay close and urgent attention to that problem, including not only the amounts sent but the assurances for effective delivery. I can assure the House that my right hon. Friend the Minister for Overseas Development, in particular, will be keeping the closest possible eye on that.

Students (Housing)

Mr. Simon Hughes: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the shortage of housing for students.
The matter is specific in that it relates to the lack of accommodation for thousands of students at universities, colleges and polytechnics who are still without adequate or permanent accommodation one month into the academic year. In addition, there are accurately known totals for the number of students at colleges in England, Wales, Scotland and Northern Ireland — 70 at Nottingham, 180 at Reading, and over 200 or more at Kingston polytechnic, University College Swansea and at the two universities in Northern Ireland. They arrived with nowhere to live and many of them are still unhoused.
The matter is important because the Department of Education and Science and other authorities, including the National Advisory Board for Public Sector Higher Education, have urged certain colleges, such as Kingston, to increase their numbers, without ensuring that there is the accommodation to take the increased number of students arriving this month. Moreover, they have not taken into account the growing proportion of grant money above the accommodation element that is required for rent, let alone the inceased restrictions on the money available to them to meet their travel costs.
Lastly, the issue is urgent, because hundreds of students today are sleeping in libraries, common rooms, bed and breakfast accommodation or on the floors of other students' rooms. In the words of the welfare officer of the South Bank polytechnic in my constituency, "This is one of the worst years ever known." Some students are spending up to four hours a day commuting to and from college, and some are travelling as far as 200 miles. With every day that passes with our students, who are meant to be our academic elite, being inadequately housed, this country's education is suffering. It is a matter that the House should debate.

Mr. Speaker: The hon. Member for Southwark and Bermondsey (Mr. Hughes) asks leave to move the Adjournment of the House for the purpose of discussing a specific an important matter that he thinks should have urgent consideration, namely,
the shortage of housing for students.
I listened with care to what the hon. Gentleman said, but I regret that I do not consider that the matter that he has raised is appropriate for discussion under Standing Order No. 10, and, therefore, I cannot submit his application to the House.

Parliamentary Questions

Mr. John Ryman: On a point of order, Mr. Speaker. I wish to raise an important point of order which, in my respectful submission, discloses a serious error in procedure. The undisputed facts upon which this submission is based will be found in the Official Reportfor 22 October, in Question No. 24, column 430. That related to a question that was answered on behalf of the Church Commissioners on Monday of this week, when the hon. Member for Wokingham (Sir W. van Straubenzee), who was giving the reply, made a gratuitously offensive and inaccurate comment about the Bishop of Durham, who has supported the coal miners during the present coal dispute.
The hon. Member for Wokingham had five minutes left of his question time. He was allocated 10 minutes from 3.10 pm to 3.20 pm. I rose to my feet to ask him a supplementary question and although you, Mr. Speaker, knew perfectly well that the hon. Gentleman had five minutes left in which to answer questions, you then prevented any further questions being asked of that hon. Gentleman, and switched straight away to other questions answered by another Minister.
In my respectful submission, when Question Time runs out of questions and the hon. Member for Wokingham had been allocated a total of 10 minutes but only used five minutes and so had five minutes still to go, it is extremely unfair that legitimate questions should be stifled by a procedure such as you adopted when this occurred.
With great respect, Mr. Speaker, I would respectfully ask you to give guidance to hon. Members who may find themselves in a similar position to that in which I found myself two days ago, when there was ample time left for supplementary questions to be asked and you, then, by

peremptory order prevented further questions and switched to another Minister whose time had not yet arrived. In my respectful submission, the comment of the hon. Member for Wokingham was gratuitously offensive and was the subject matter of a legitimate further question.

Mr. Speaker: First of all, I think that the hon. Gentleman should have raised this matter on Monday—

Mr. Ryman: I tried to but had difficulty in doing so.

Mr. Speaker: Order. In fairness, the hon. Gentleman gave me notice that he wished to do so and when the time arose he was not present in the Chamber.

Mr. Ryman: Further to that point of order, Mr. Speaker.

Mr. Speaker: Order. I am on my feet.

Mr. Ryman: It is not accurate.

Mr. Speaker: I think that the hon. Member is slightly in error. We moved on to questions to the Church Commissioners at 3.10 pm. There were 10 minutes for that.

Mr. Ryman: Not 10 minutes. It is all wrong.

Mr. Speaker: Five minutes for that. They began at 3.10 pm, and if the hon. Gentleman looks at his Order Paper he will see that at 3.15 pm we moved on to questions to the Public Accounts Commission. I must say to the hon. Gentleman that I regret that I did not see him getting to his feet.
The hon. Gentleman asks for guidance for the future. May I suggest to him and, indeed, to all hon. Members, that it would be most helpful to the Chair if those who wish to ask subsequent supplementary questions could get to their feet at once rather than at the very last minute.

Control of Religious Sects and Cults

Mr. David Alton: I beg to move,
That leave be given to bring in a Bill to control the activities of religious sects and cults.
The Bill has one simple aim and provision—to allow parents and next of kin rights of access to relatives who have joined religious cults. It does not seek to codify the respective merits of different groups, it is not a theological measure, and it accepts the need to guarantee fundamental religious freedoms. It is a trigger mechanism, which aims to provide aggrieved and worried parents with the opportunity to seek legal redress where access to next of kin is denied.
That it should be necessary at all to introduce such a measure surely says something about those organisations that have curtailed access to loved ones by families.
The Bill has sponsors throughout the House, and has the backing of Members in the other place who intend to raise this issue again there if it is given a First Reading today.
One of the most remarkable social developments of the past decade has been the explosive growth of cults, sects, or "new religious movements." Nowadays there are hundreds of these organisations operating in Britain, with a membership well into the hundreds of thousands. Hon. Members will have heard of most of the well-known groups, and it is not necessary to catalogue them now. However, I should like to quote from two letters that have been sent to me by worried parents. I am sure that other hon. Members will have received similar letters. The first letter states:
We are both old age pensioners (72 years of age) and have an only son 29 years old. Nine years ago he went to college to train as a teacher and was approached in the street by one of these people (the Moonies), the consequence being he left the college to join them. He freely admits they are responsible for ruining his chances of any career and because of their indoctrination he was admitted to a psychiatric hospital, but insists he can't dispel them from his mind … My husband and I have lived in misery through this last nine years, but of course we are very much more concerned about the future of our son when we won't be around.
The second letter is from a retired clergyman, with a married daughter, who says that she joined the cult about two years ago. He says:
Within the year she had given up her job and paid £4,000 for a residential course … During that year she was subjected to some very damaging techniques, including sensory deprivation, hypnosis, physical stress etc. … My wife and I have always maintained that we would not try to force our attitude and religious outlook on our own children … we have seen our daughter change out of all recognition in those two years.
I have read similar disturbing accounts in many other letters that I have received. If they were merely the complaints of parents who did not understand their children, we would be entitled to ignore them. However, they are more than that. There is ample evidence of excessive pressure being exercised during recruitment, usually on the young, the lonely and the vulnerable. Some unemployed young people who arrive in London from the north of England, Scotland or Wales in search of jobs are tempted by a hot meal or a bed for the night. Young people are lured in that way to the cults. The tragedy is that many such young people are so vulnerable that they do not know what they are letting themselves in for. Indeed, if the demands of the group were made clear to the prospective members, it is unlikely that they would join the cult.
Once in the cult members may be deliberately isolated from friends and relatives. Letters and telephone calls may be intercepted. Simple requests from parents as to the whereabouts of their children may be met with insults or evasion. Frequently, cult members are taught that ordinary family relationships are evil and that they must never see their relatives again.
There are many instances of university education being interrupted and of undue influence being exercised to secure the inheritance or assets of new recruits. Members who decide that they want to leave an organisation are often harassed and intimidated. On a note of caution, I add that I do not mean to imply that every cult is guilty of such behaviour, but I am sad to say that all too many of them are.
Hon. Members will be aware of previous attempts to express concern about these issues. On 5 April this year FAIR — Family Action Information and Rescue — organised a lobby of Parliament. Many hon. Members will have heard from some of the 100 parents and grandparents who participated in that lobby. The Leader of the Opposition was among those who gave them a sympathetic hearing.
On 14 May the hon. Member for Wiltshire, North (Mr. Needham), whom I am glad to see in his place today, in an Adjournment debate raised the problems caused by the organisation Exegesis Programme after one of his constituents involved with ii had died. At that time, the Under-Secretary of State for the Home Department, who is also in the Chamber today, said:
I am firmly convinced that the sinister activities of some of the groups must be exposed by every means possible and most vigorously discouraged." — [Official Report, 14 May 1984; Vol. 60, c. 127.]
I agree with that.
On 22 May the European Parliament adopted a report on the activity of new religious movements within the Community drawn up by Mr. Richard Cottrell, the Conservative MEP for Bristol. He proposed a system of voluntary guidelines for the cults as an aid to their integration within society and honest respect by them for the freedoms which our society confers upon them. The resolution adopted by the European Parliament called for action by the Council of Ministers, the Commission and member states in a co-ordinated European response. Five months later we are still waiting. We have waited long enough.
Of the many complex issues that can be raised, I wish to concentrate on one—access. Ideally there should be freedom of access to cult members at all times — a freedom which is all too often denied. The right to know where a child is and to have access, alone, to him or her could be a great advantage to grieving parents. Such visits from family or friends are often denied by the physical removal of the cult member to an entirely different location, which is sometimes concealed from relatives.
The House should insist on requiring any organisation to state the location of its members, especially any organisation which enjoys charitable status. I heard of a man who left the Moonies and who spent three years looking for his Moonie wife. Thankfully they are now reunited, but, if rights of access has existed, that man would have been spared three years of anguish and heartache.
Ultimately the problem in relation to charitable organisations, such as the Moonies, will have to be


tackled. The definition of a charity includes the provision that it must be beneficial to the community. Religions are generally assumed to be a public benefit. But it is open to any cult to call itself a religion to achieve charitable status and thereby to double its income through tax-free interest on investments and tax repayments on covenants.
The Select Committee on Home Affairs should turn its attention to these issues. The provision of information about different organisations and cults is relevant. Many former members of cults have stated that if they had been aware of just what membership entailed, they would never have joined. Some cults use techniques, such as deception, to recruit members and solicit donations, often without revealing their true identity until much later. The dissemination of information is perhaps a job for the British Council of Churches—an eminent organisation—which is investigating the possibility of developing a network of individuals trained to spread information, advice and help. However, it is too short of resources to carry out the work effectively. Parliament should consider providing practical assistance.
I have mentioned only a few of the many issues that could be raised in connection with the activities of so-called new religious movements. I hope that I have been of some help by drawing hon. Members' attention to them. I hope that the Select Committee will decide to take up these complex issues in a comprehensive inquiry. I have written to the Chairman of the Select Committee on Home Affairs requesting him to do that. Among other things, that would allow the cults to state their views. It would go a long way towards allaying the feelings of paranoia and persecution from which many of them, sometimes unjustifiably, suffer. Some have their own grievances

against groups, such as FAIR, but through a Select Committee inquiry they could air those views objectively and they would be properly examined.
I have been accused by some groups of seeking to interfere with religious freedom. Nothing could be further from the truth. At best, it is an honest misunderstanding. At worst, it is a deliberate ploy to drum up sympathy and distract attention from the real issue. The real issue is denial of freedom. If individuals become social and mental wrecks through involvement in cults, society cannot turn its back. If people are parted from their sons, daughters, family or friends, that cannot be ignored. Surely we in the House must not turn away.
I emphasise once more that it is not the theology of the cults with which I am concerned, but the harmful actions resulting from that theology. Let us never forget that freedom becomes oppression when the liberty of a single individual is taken away. Queen Elizabeth I, speaking in defence of religious freedom, talked about opening windows into men's souls. For many members of these cults there are no windows—either into their souls or into their minds. They are shuttered and barred. I ask the House to do nothing more than to draw back the bolts.

Question put and agreed to.

Bill ordered to be brought in by Mr. David Alton, Mr. David Atkinson, Mr. Patrick Cormack, Mr. Julian Critchley, Mr. Sean Hughes, Mr. Kevin McNamara, Sir Anthony Kershaw, Mr. Fergus Montgomery, Mr. Charles Morrison, Mr. George Robertson, Sir Geoffrey Johnson Smith and Mr. Robin Squire.

CONTROL OF RELIGIOUS SECTS AND CULTS

Mr. David Alton accordingly presented a Bill to control the activities of religious sects and cults: And the same was read the First time; and ordered to be read a Second time upon Friday next and to be printed. [Bill 233.]

Orders of the Day — Ordnance Factories and Military Services Bill

Lords amendments considered.

Clause 1

TRANSFER SCHEMES

Lords amendment: No. 1, in page 1, line 6, at beginning insert—
Subject to an affirmative resolution of each House of Parliament".

The Minister of State for Defence Procurement (Mr. Adam Butler): I beg to move, That this House doth disagree with the Lords in the said amendment.
I make an important point at the start. The amendment deals with a very narrow point. Its essence was the subject of discussion in Committee, when a similar amendment was proposed by Labour Members. It was opposed by the Government and defeated in Committee. The Government remain opposed to the amendment, and I shall be urging the House to reject it.
During the passage of the Bill through the House and the other place the Government have done their best to keep Parliament informed of their intentions. I shall repeat the main points. We have made it clear that we shall transfer to the new company all the assets that are currently attributed to the royal ordnance factories' training fund, together with other specific assets, and that all this property will be vested in one company. We have announced that there are to be four subsidiary companies, each of which will correspond to a division of the business and will act as an agent subsidiary of the holding company. We have explained how we intend to treat the transfer of intellectual property rights. We undertook to provide, and have provided, copies of the relevant articles which in due course it is intended to incorporate into the articles of association of the company, designed to prevent foreign control. We have discussed at length the principles of valuation that will be applied to the assets transferred.
We have explained the position of employees transferred from the Civil Service to the employment of the new company and their terms and conditions of employment following the transfer, including the new company pension scheme. We have emphasised that we intend—I am happy to repeat this once again—that they will suffer no detriment as a result of the transfer. Most of these matters go far beyond what will be dealt with by a scheme made under the Bill. It has been the Government's concern that the House should understand not simply the mechanics of the transfer of assets but the entire range of Government thinking with regard to the new company's future.
What is proposed by the amendment is that the scheme could not be made, and not one part of what the Government plan to do, and have said publicly that they plan to do, could come into effect until that scheme had been considered and approved by both Houses of

Parliament. The scheme is nothing more than conveyancing machinery for transferring property from the Secretary of State to the company. That is what the scheme is about, and that is what we are discussing. The Bill covers a great deal more.
The scheme will say nothing about the structure of the new company organisation, the value of the company, the articles of association, employees and their future terms and conditions of service, privatisation, future Government policy towards the new company or any of the matters affecting the future of the company about which the House is quite rightly concerned, and which the Government have been at pains to disclose. The amendment, if accepted, would mean in effect hat although the length and breadth of the matter can be, and has been, debated in the House and in the other place, and every detail of it considered and voted upon, nothing could get under way until Parliament had been able to examine, in the minutest detail, the scheme, about which everything essential is already known.
I consider this concern with the detailed words of the scheme to be quite disproportionate to the importance of the general issue. It is not an attempt to learn more of the Government's intentions, but solely an attempt to delay matters. It is not as though Parliament will not see the scheme. I remind the House that the scheme is required to be laid before Parliament within one month of its coming into force. My predecessor, my hon. Friend the Member for Chertsey and Walton (Mr. Pattie) undertook, in a written answer to a parliamentary question on 18 July that
the scheme … will be placed in the Library as soon as work upon it has been satisfactorily completed and certainly not later than … vesting day".—[Official Report. 18 July 1984; Vol. 64, c. 249.]
That is the day on which it actually takes place. The scheme and the accounts that follow may be the object of scrutiny by the Public Accounts Committee, which will no doubt publish a report in due course. All this shows that the Government have no wish to hide any of these matters from the scrutiny of hon. Members. We would hardly be able to do so even if we so wished.
The truth of the matter is that the amendment would not achieve the kind of parliamentary control that it envisages. Most of the important aspects of the matter fall outside the provisions of the scheme. A. debate on the scheme itself would not advance Parliament's knowledge of the provisions by any appreciable degree. Hon. Gentlemen know that a debate on the scheme would be used merely as an opportunity once more to go over the general principles of privatising the ROFs. Points that have been raised many times in the House and the other place will once again be taken out and paraded.

Mr. Lewis Carter-Jones: Is the right hon. Gentleman not attacking the Chair by what he is saying? If the matter has been discussed over and over again, whether we discuss it again is a matter for the Chair, not for the right hon. Gentleman.

Mr. Butler: With respect, and subject to correction, Mr. Deputy Speaker, if the amendment were to be passed, it would require the scheme to be debated under the affirmative procedure. I do not believe that in that case Mr. Speaker or Mr. Deputy Speaker would have a say in the matter. We are not seeking to deny the House or the other place the opportunity for debates on the Bill. However, there have been the usual thorough debates on the Floor


of the House and in Committee, and in the other place. We are having a further limited debate through this amendment. However, the Government cannot be accused of denying the House opportunities for debate.
I said that I thought the amendment was a delaying tactic and that there was no reason why there should be an opportunity for all these matters, which had been discussed in full, to be paraded again. I remind the House that both Houses have approved the main and crucial provisions of the Bill.
We cannot afford to risk any further delay. The Government and the management of the ROFs are anxious that vesting day should take place at the earliest possible opportunity. It is true that there are still some details to be resolved before this can happen, including those connected with the precise financial structure of the company and with the final terms and conditions of employment. No real progress can be made in getting the company under way and getting it started in business and beginning to build for a profitable and successful future in a purely commercial environment until vesting day.
The House will recall that originally the Government hoped that vesting day would be 1 October. Many expectations in the ROFs were geared to that date. There was considerable disappointment when it proved impossible to meet that date. The amendment would require that, even when all outstanding problems had been resolved and the scheme was ready to be made and take effect, vesting day could not take place until the scheme had been placed before Parliament and debated here and in the other place. If there were some real advantage to be obtained from this, the Government would accept the delay in vesting day that such a necessity might occasion. However, for the reasons that I have mentioned, there is no advantage and no necessity for that.
To delay vesting day while the House again went over ground that had been well trodden would do nothing but damage to the new company. Such delay would merely perpetuate and add to existing uncertainties. It would lower morale and dilute enthusiasm.
The Government's intentions are clear. The Opposition may not approve of them, but they understand them. We must get on and proceed towards vesting day. Let us remove uncertainty, let the new company get down to business and show what it can do.

Mr. Jack Straw: While the right hon. Gentleman is talking about the removal of uncertainty, will he comment on rumours that 1,800 job losses are likely in the ordnance factories, including 200 at the Blackburn factory and up to 500 at the Chorley factory?

Mr. Butler: I shall willingly say something about that. I thought that the amendment was too narrow to allow me to comment on that subject, but, with your discretion, Mr. Deputy Speaker, I am happy to respond to the hon. Gentleman's question.
I am not sure that I can add anything to what has already been said publicly, but in some ammunition and explosives factories the order book is weak. Unless it recovers, it is difficult to foresee anything except the need for redundancies. The management, with whom I am in close contact, is doing what it can to find new orders and is considering whether it is possible to adjust production programmes. No final decisions have been taken.
Some try to insinuate that if redundancies take place they will be connected with the Bill, vesting day or privatisation. I deny that suggestion. We are talking about a commercial situation and it is important for me to explain that situation to the House.
There are two principal factors. First, over the two or three years since the Falklands conflict, and generally to improve war maintenance reserve, stocks of ammunition and explosives have been built up and the factories have been operating at a high level. The additional work load associated with those enhancements is coming to an end and the Ministry of Defence requirements will return to normal levels.
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Secondly, it is suggested that there has been a deliberate switch of an order to Germany. I deny that it is a switch by the Government. Those who take a close interest in the matter know that there is a collaborative arrangement in the production of the towed howitzer, the F870, and that the ammunition for it is made in different parts of the European Community.
The ROFs have gained more than their share of the orders to which, strictly speaking, they were entitled under the collaborative arrangement. When a further tranche of ammunition was required, Germany was given the order as a move towards redressing the imbalance that had developed.
In summary, there has been a reduction in the Ministry's requirements and an order that might have been expected by the ROFs has gone, by right, to Germany.
Any notice of redundancies will be announced in the normal and proper way and would be a precautionary notice. I shall continue to support the ROF management in trying to improve the order book, but at the moment the position is not helpful.

Mr. Mark Fisher: Will the Minister give us a categorical assurance that if redundancies have to take place they will do so before vesting day, so that the terms and compensation will be those offered by the Ministry of Defence? If he cannot give that assurance, will he at least assure us that the terms of redundancies that occur after vesting day will be no worse than those offered by the Ministry?

Mr. Deputy Speaker (Mr. Harold Walker): Order. I do not wish to deflect the Minister from responding to that intervention, but I remind the House that we are straining the terms of the amendment before us.

Mr. Butler: You have been tolerant, Mr. Deputy Speaker, but this is a matter of great anxiety to hon. Members on both sides of the House and to some of those listening to our debate. It was helpful for me to be able to say what I did. I assure the hon. Member for Stoke-on-Trent, Central (Mr. Fisher) that redundancy terms will be identical for those made redundant before or after vesting day. I imagine that if redundancies are declared the management will wish to make an announcement as soon as it reasonably can and it will have to judge the situation from that moment. I can give the hon. Gentleman the assurance for which he asked.
I return to the peroration of my speech on the amendment. Let us not delay matters further. We should disagree with the Lords amendment so that there is no risk of delay. There is no need for more explanation of the scheme.

Mr. Kevin McNamara: My first pleasant duty is to welcome the Minister on his first appearance at the Dispatch Box in his new job. I hope that when he has finished with the ROFs he does not leave the welter of disarray that he has left in Northern Ireland industry, with the closure of so many factories and the loss of so many jobs.
I am sure that the right hon. Gentleman and I will have many enjoyable debates in the years ahead, but I am amazed at the attitude that he has adopted to the Lords amendment. He suggested that it was only a narrow point, but, in fact, it seeks to return to Parliament some control over the Minister's actions.
The Bill is a major enabling measure. If a Labour Government came to the House, said that they wanted to take an industry into public ownership and asked for the principle of that decision to be agreed by the House—without giving details of compensation, organisation, the transfer of liabilities—there would be an outcry from Conservative Benches. The Labour Government would be accused of riding roughshod over Parliament and of taking dictatorial action. We would be told that we had, in the words of the present Lord Chancellor, an elective dictatorship—though it seems that the present one does not come in for the same criticism from the Lord Chancellor.
Yet that is precisely what the Bill is doing. The clause gives the Secretary of State for Defence a blank cheque to do what he wishes. The Secretary of State should be obliged to come back to the House and to the other place and say, "This is the scheme. This is what I want to do."
It is nonsense to suggest that there will be proper parliamentary scrutiny after the decision has been taken. There is no proper method of parliamentary scrutiny. The Minister referred to the provision in clause 3. Subsection (9) states:
Within the period of one month beginning with the day on which a scheme comes into force, the Secretary of State shall lay before Parliament a copy of the scheme, but omitting any material the disclosure of which he considers would be contrary to national security or to the commercial interests of any person.
The information to be given to the House and the public about an industry of vital importance to the nation's defence will depend purely and simply upon the whim and the decision of the Secretary of State. We will be given no real substantive information. The House cannot accept such a provision. After the Bill has been passed, we should have the right to consider what has been said.
It will be only an affirmative order. We will not be able to amend it. However, we will be able to examine what is happening, and, before the scheme goes into operation, the Government will have to justify it to the House. It is important that we should have that power.
It is no ordinary industry which is being privatised. The industry has never been in private hands before. It has been a state industry since the reign of Henry VIII. The industry is vital to the defence needs of this country. What is involved is the supply and quality of ammunition for our troops, of vehicles, propellant and explosive—the life blood of the Army. If we are not to be allowed to discuss the proposals, and the principles on which the industry is to be passed to private ownership, an industry which is vital to the security of our country will not receive proper attention from this House and we shall not know in what manner it is to be given to the City friends of the Government.
The Minister of State has stated that much information was given in Committee and in the other place. However, that information had to be wrested from the Government. The undertakings which they gave were forced on them by the rightful suspicions of, among others, Conservative Members, who insisted that the information should' be forthcoming. I pay tribute to those hon. Members.
We were promised two documents. We should have received them by now. Vesting day was to have been 1 October—two months after the Bill had passed through both Houses—and any delay is not the responsibility of the Opposition or of the other place but of the Government. The Government have pressed too much into their parliamentary programme, and the Department has been unable to deal with most other problems associated with the denationalising of the royal ordnance factories.
By now we should have seen MOU, the memorandum of understanding—the dear friend of the hon. Member for Chertsey and Walton (Mr. Pattie). Where is it? What will it contain? Perhaps we shall deal with that point on a later amendment.
More particularly, we have not been given the scheme. We could reasonably have expected to have received it by now. We were told that everything would be ready for 1 October. We were told that all the best brains in the Department were working.

Mr. Denzil Davies: That is a relative term.

Mr. McNamara: I do not share my right hon. Friend's view. I would like to think that morale in the Ministry of Defence, and indeed in the rest of the Civil Service, was high and that, because of the way in which the Secretary of State treats his civil servants, they rushed to work extra overtime all the time in order to get the work done. However, the work has not been done and we know that morale there is very low indeed.
The country needs to know what is being sold off, but I understand that even the Department still does not know what is to be sold and what is to be kept. If the Department does not know, neither does the Minister.
As information was elicited in Committee and in the other place, we know what we might have expected to appear in the scheme. We might expect this mere conveyancing document to contain a description of the property and rights appropriated to the trading fund of the royal ordnance factories, and conversely a description of what was not to be included. Presumably, such information would be given in the scheme.
The Minister has told us today that the whole question of intellectual property rights was satisfactorily dealt with in Committee. He may have explained the principles, but he did not tell us what was to be transferred, who was keeping what, and what was to happen to the patent rights.
We still do not know—presumably, this too would be made plain in the scheme — what will be the relationship of the agency factories with the new Royal Ordnance plc. What will be the position of Featherstone, with its hard alloy components, of Powfoot with the propellants and of Summerfield with the explosives? How will they compete with the factories in the new divisions? How will they compete with private industry? Are they to compete one against another? We do not know what the rules of competition will be, but presumably the scheme would tell us.
We do not know what the liabilities are. We have had no description of them. However, the Minister of State told us in a marvellous statement that he knew what the valuation principles would be.
In Committee, it emerged that no one knew what the valuation principles were to be. Since the Bill completed its Committee stage and, I believe, since it passed through the other place, we have heard that Coopers and Lybrand, the firm responsible, has not yet itself finally decided what the valuation principles will be. That being so, how could we be expected to know what they were to be and to accept them?
The Under-Secretary gave us some tremendous help on this matter. He expounded a new economic doctrine "Lee's theory of usefulness" which will appear with Gresham's law and Marx's theory of the surplus value of labour in all the textbooks. On what principle was the valuation of assets to be based? The Under-Secretary said:
The question arises … on what principles is the valuation of assets transferred under the Bill to be made? The answer is that the valuation will be made on the basis of its usefulness to the new company."—[Official Report, Standing Committee D; 28 February 1984, c. 323.]
That is a dangerous valuation and an extraordinary definition — and the man is supposed to be an accountant. Perhaps that is why he came to Parliament. If he deals with all our national assets on that basis, the country will be bankrupt.
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That is a strange theory of usefulness, but if Coopers and Lybrand has not finalised the principles, the Department and the Treasury cannot have reached agreement with the accountants. Yet we are expected to disagree with an amendment that would give us precisely the information that the Government have denied us and which is of paramount importance to the nation. Obviously, when an industry has not previously had to bother too much about these matters, arriving at valuation principles is bound to be complex. The Government are rushing to privatise an industry which, by their own definition, involves complex and difficult issues. They do not know what the industry is doing, where it is going or what its value is.
Many matters have emerged in trying to arrive at valuation principles. For example, the ROFs have a suite of offices in Egypt under an informal arrangement with the Egyptian Government. When the Secretary of State visits Egypt he may wish to inspect them and assess their value. There are 600 railway wagons, but no one knows whether they belong to British Rail or to the ROFs. It is difficult to ascertain who owns what and why. We are expected to pass legislation when the Government do not know what they are buying or selling. We cannot agree to that—

Mr. J. D. Concannon: It has all been leaked anyway.

Mr. McNamara: I hope that has been noted.
There has been a change in organisation within the Ministry of Defence and the ROFs. I understand that the Master General of Ordnance has created a new contract department, which means more civil servants. I understand that there will also be new contract departments within the four new divisions.
Other matters must be considered. What will be the rights of Royal Ordnance plc in regard to the Ministry of

Defence facilities that it will use—until such time as they are privatised, which I understand to be the Government's intention? What about weapon and vehicle proving sites and weapon ranges — who will pay for what and how much? Will all additional costs be published in the balance sheet when we eventually see it, if we ever see it?
This is a different position from that painted by the Minister. He said that it was a small, narrow point and could not understand what was bothering the House. He said the amendment would create further delays and that we should get on with the job. We do not even know what the job is because we have not been given that information—and the Minister does not know it either. However, we do know that there is a real chance that people will lose their jobs. The Minister was cagey when he replied to my hon. Friends' questions. We need to know whether the figures are accurate. Are 600 jobs at stake at Birtley, 450 at Chorley, 150 at Blackburn and 460 at Bishopton? We listened carefully to the Minister. All this ties up with the scheme. If the Government can flush out 1,600 jobs from the factories, that makes them easier to privatise and more attractive to buyers. The order given to Enfield, which the Under-Secretary almost, but not quite, put on the record on Monday evening, makes it more attractive. Yet there is a public need, creating public demand, being met by a public factory—but that will be given away for private profit. There is far more at stake than the Minister has suggested.

Mr. Straw: Does my hon. Friend agree that the Minister's answers, which were imprecise, are quite unacceptable, and that that is no way to treat the ROFs' employees—1,800 of whom now face a real threat to their jobs and do not know on what terms any job losses will take place?

Mr. McNamara: rose—

Mr. Deputy Speaker: Order. I hate to interrupt the hon. Gentleman, but, as I said during the Minister's remarks, it is difficult to reconcile a discussion about redundancies with the amendment before us. Would it not be wiser to raise constituency interests and redundancies under a later amendment dealing with commencement?

Mr. McNamara: I bow to what you say, Mr. Deputy Speaker. However, the amendment states that the Secretary of State may make a scheme
subject to an affirmative resolution of each House".
The scheme includes labour, valuation and assets. However, I accept what you say, other than to say—I am not challenging you, and would not do so—that when the Minister said that it was a commercial matter and that commercial factors affected the decision, that is relevant to section 1 of the scheme.
The Minister spoke about replacement to normal level of munitions stock. The majority of the 1,600 people who may be affected were working in the factories long before the Falklands dispute, and I hope that they will work there for a long time to come. The Minister cannot use the replenishment of stock after the Falklands dispute as an excuse to get rid of jobs.
The Minister gave a final, feeble excuse of not wanting to waste any more time. It is the Government who are wasting time. We have had no sign of when vesting day will be. We cannot vest if we do not have a scheme. I have tried to list seven or eight matters that may be contained


in any scheme. The Government have not yet reached agreement on many matters, and on the primary matter of valuation neither the Department nor the Treasury has accepted any proposal from Coopers and Lybrand. There must be time for both Houses to examine the scheme and the principles laid down.
The Government could do much better than that. Instead, they continue to steamroller through Parliament a Bill which is obnoxious to those who work in the factories, to many Conservative supporters and to many others. Members from all parties in the other place objected to the principle of getting rid of this important national asset—of flogging it off to the Government's friends in the City — without any need to do so and without any feeling for those employed in the industry or for the national interest. But then, that is all we have come to expect from Conservative Governments.

Mr. Robert Atkins: I commiserate with my right hon. Friend the Minister for coming at a late stage to debate an interesting and complex Bill which has taken up much time in Committee and on the Floor of the House. I congratulate him on his appointment, and commiserate with him for having to carry the burden at this late stage.
However, I must take issue with him on some matters which are causing anxiety to my constituents who work either at ROF Chorley, ROF Blackburn or ROF Patricroft. For that reason I am greatly interested in the legislation. From the beginning I have said that I support the Government. I am confident that the Government's view will prevail, and rightly so, for some of the reasons that my right hon. Friend gave. Nevertheless, this is an opportunity to raise the anxieties of the work force both at management level and on the shop floor about certain aspects of the Bill.
I gave my support earlier to the Government's view that a skeletal framework was the best way to flesh out the Bill through discussions with the work force and trade union and management representatives. It would ensure that we achieved what was best for all involved. Only last week on a visit to ROF Chorley the work force told me that the official side, which I understand to mean all those involved in disucssions with representtives of the ordnance factories, is happy to wait until vesting day, to tread water and to allow the company which will come into existence to sort out the unresolved difficulties and problems. That may not be an accurate view, but it is a perceived view, Therefore, it must be recognised.
Many issues regarding the no-detriment guarantee, which was given in previous debates in the Chamber and in Committee, are causing anxiety. I am therefore grateful to the Opposition for having tabled an amendment which allows us to discuss, under the terms of the scheme, some anxieties which do not appear to have been recognised.
The work force does not wish to have to make sudden and urgent decisions on problems relating to pensions and available options by being confronted with a short time scale in which to make decisions. The work force fears that in months or years to come it may find that those decisions were not in its best interests. Further discussions are therefore required, especially regarding pensions.
There has been considerable pressure for full index-linked pensions. Last week a constituent told me that without that guarantee the no-detriment offer counted for little. It was suggested that there should be a deferred

option scheme on pensions to allow people to decide, not immediately but over a period of time—perhaps six months or a year—which option would be best for them.
The work force is also worried about the rules of the new pension scheme, under which the trustees of the scheme have the right to discontinue it. I sought to explain to the work force that that was unlikely. Nevertheless, that matter must be cleared up. If it is the case — I understand that the trustees are insisting that it should be the case—I should like my right hon. Friend to justify it.
Other worries include matters relating to what is called technical redundancy. The union side is still discussing with the official side the redundancy which it believes should be merited as a result of the change from being a civil servant to not being a civil servant. I should be grateful if my right hon. Friend would deal with that matter.
The work force believes that the terms of the pension scheme, under what is known as the Ministry of Defence Manual, sections 9 and 11, should obtain. It is not yet satisfied that those discussions have been fruitful. I hope that my right hon. Friend will consider that matter.
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I wish to raise other matters which do not fall specifically within the terms of the amendment. I am confident that the amendment will not be carried, but I cannot miss the opportunity to mention the odd matter and hope that the Chair is not listening. One matter, relating to the problems of some of the work force, was mentioned by the hon. Member for Blackburn (Mr. Straw) and others. I shall not go into detail because it is difficult to do so when talking about a rumour.
It must be made clear, again and again, that the problems depend entirely on the reduction of the MOD order book and the requirement necessary under the terms of the memorandum of understanding that the FH70 work must go to Germany, where it is needed. We are entitled to about 23 per cent. and have already done 36 per cent. of it. Under the terms of the agreement, the Germans are entitled to that and we cannot refuse them. However, it may entail some redundancies. The views of those working in the ordnance factories about redundancies and pensions would be bound to be affected if those who remain decide to take a certain course of action.
Matters relating to the Government's or the ordnance factories' view about an offer of voluntary premature retirement to those likely to lose their jobs—the number is normally extremely limited—should be considered by the ordnance factory organisation, new and existing management and the Minister. They should also consider whether the long-term principle of last in, first out, is right in circumstances where special skills are important for the future.
There is undoubtedly uncertainty about those matters and about the loss of the preferred source arrangement which has obtained for so long. Where a company is likely to be privatised, and therefore to become a competitor alongside other competitors for MOD business, the preferred source arrangement cannot continue. It is believed, with some justification, that while the factories remain a state operation, the preferred source arrangement, or something similar, should apply until vesting day. As the hon. Member for Kingston upon Hull,


North (Mr. McNamara) said in relation to the use of MOD facilities and ranges, it is important that the advantages of the preferred source arrangement, not necessarily under the existing terms, are retained until vesting day.
I have been told that the managements of the Royal ordnance factories are losing credibility because they cannot explain, in terms which the work force both locally and nationally wishes to hear, exactly what is going on. I accept my right hon. Friend's stricture that, in some respects, delay will compound those problems or worries. I am not entirely sure that I agree with him that morale will become low. With the threat of redundancies, morale is already low. In terms of the future of the ordnance factories, the quality of workmanship, professionalism and all the matters to which we have referred here and in Committee, I do not believe that the workers have a longterm fear about their product line, but they are clearly worried about the order books, about the position of the Ministry of Defence, and about their future in relation to pensions and redundancies. Whether or not my right hon. Friend believes that it is unfair for me and some Opposition Members to refer to those matters, none the less the perceived view in the work force and in management is that those matters are still unresolved.
I shall support the Government on this amendment, for reasons that I have already given, but I still believe that there are questions to be answered and problems to be resolved. Those problems are not insuperable, but my right hon. and hon. Friends and the official side of the Ministry of Defence must understand that the work force is extremely worried. Although I emphasise that the imminent redundancies have nothing to do with privatisation, the perceived view is that there is a relationship and that has caused confusion and anxiety. Ministers have a duty to make matters as clear as possible as soon as possible with sympathy and understanding.

Mr. Fisher: I add my congratulations to the Minister on his appointment, but hon. Members who served on the Standing Committee that considered the Bill must have been deeply disappointed at the way in which he approached the subject. He appeared to say that parliamentary scrutiny was a narrow point and that because we had discussed the Bill in Committee it was not worth discussing it again. That cannot be so, and all hon. Members should deplore such a view from a Minister.
The Minister also said that because we had discussed the Bill fully in Committee there was no need to discuss it further now and that the Government should proceed with their plans, failing to make the simple distinction between the principles in the Bill and the way in which they are implemented. That is what worries the House tonight. The House and those who work in the ordnance factories have a right to know how the Government intend to proceed.
The Minister appeared to say that we know it all and that, therefore, there is nothing more to say. He glossed over the problems of the scheme, and anyone coming to the debate for the first time and listening to him would gain the impression that the scheme had been laid out in the Bill and that there was nothing to add. Nothing could be further from the truth. We know little about the scheme. We know that Coopers and Lybrand was commissioned by the

Government to produce valuation principles. When the Under-Secretary of State replies, will he say whether the report has been completed and whether Coopers and Lybrand has advised on the principles of valuation? Presumably those principles will be included in the scheme, but the House and the country have a right to know how those public assets will be disposed of. The fact that the House must scrutinise matters relating to taxpayers' money means that it has an absolute right to be informed about the scheme.
The Minister seemed to give the impression that hon. Members knew exactly what would be valued — the rights and properties already appropriated to the trading company and those that had yet to be transferred. Some Ministry of Defence rights and properties that are not presently with the ROFs will be transferred to the company. They should be itemised clearly so that hon. Members may scrutinise them. The same applies to liabilities, agreements, licences and contracts, and I hope that the scheme will have much to say about the tendering arrangements for the subsidiary companies or their divisions in the ROFs. There are rumours that the tendering arrangements are far from satisfactory and that companies inside the ROFs and factories that have been working on some contracts for years will have to re-tender competitively, not only against other companies inside the ROFs, but against private companies. If that is so, will the Minister explain how those arrangements will work and how the pricing arrangement will reflect the research and development costs that have already been incurred in the ROFs?
The Minister should not have glossed over those important points. Anyone listening to him would have gained the impression that we knew which patents, rights and intellectual property would be transferred, but we have been waiting patiently for the list of between 200 and 300 patents for eight months. In Committee the Under-Secretary of State said that we would get a full and frank list of the intellectual property within two or three months, but we are still waiting for it. I am sure that the list will be published in the scheme, but it must be put before the House before vesting day so that we know what is happening.
We are also concerned about Ministry of Defence facilities, such as test ranges and proving facilities, which must be of great interest to the ROFs, as they determine their ability to test and prove their work. Presumably they will also be covered by the scheme, but it is not before the House, which has the right to know.
I am also worried about the memorandum of understanding that will explain the relationship between the Secretary of State, as the chief shareholder, and the new company. We should have a clear understanding of that relationship, but the Minister did not refer to it. He said that most of the articles of association were known to the House, but that is not the case. The articles of association have not been put before the House in a clear and frank way. They are different from the memorandum of understanding, and the Minister of State, even allowing for the fact that he is new to this brief, should get the distinction correct and should be clear that the House has a right to know.
I understand that the capital structure of the company, pensions for transferred staff, contracts and conditions of employment are being negotiated at present by the proposed management of the new company, the Treasury


and the Ministry of Defence. The House must know about the state of the negotiations as regards pensions, terms and conditions and especially the capital formation of the company before vesting day. The House has the right to scrutinise such matters and to recommend changes. If the Government are reluctant to provide that information, Conservative Members who take an interest in this matter should ensure that the Bill is not passed today, and should demand that those basic facts are made known to the House before it is too late.
The Minister must know that what he said about delay is nonsense. An affirmative resolution could be passed by the House in a matter of hours. It is a matter not only of courtesy but of parliamentary democracy that that procedure should be followed and that the Government, even with their steamroller majority, should go through the form of putting their detailed plans before the House.
The valuation of the new company is of deep concern to taxpayers, since much public money is at issue. The book value of the ROFs is £450 million, plus the goodwill. The value of the patents is yet to decided, as is the value of any other assets that are to be transferred. We have had nothing on valuation. We do not know what the capital structure of the company will be. We do not know what the valuation of the assets will be and how they will be transferred. It is vital that the Government make those matters clear. The House should have the right to consider the plans for capital formation and valuation by affirmative resolution. The Board of Inland Revenue should, and I hope will, be extremely interested in the valuation of the assets, because until they have been valued and agreed with the board it will be difficult for it to allow future tax allowance claims.
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The Government have a duty to the Treasury and to the Inland Revenue to make clear and put before the House the valuation of the assets and the capital structure of the company so that there will be no doubt about how public money is being used. With the precedent of previous privatisation deals, Opposition Members are sceptical about depreciation policy and the valuation of assets. There is also the fact that when privatisation takes place there is a tendency for the Government to undervalue the shares and, effectively, to give huge discounts to whoever is buying them in order to make the privatisation a success. That must not happen in this case. The only way in which we can ensure that and reassure ourselves that it will not happen is for the Minister to lay the scheme, the valuation, the memorandum of understanding and the capital formation of the new company before the House and let us and not the Government, be the judge of them.
The Minister completely failed today to answer crucial questions. We do not know whether the scheme and the memorandum of understanding are ready. I hope that the Minister will bring us up to date on that when he replies. If they are ready, why have they not been published and brought before the House? If they are not ready, why are they not ready? What has the Ministry of Defence been doing? Presumably there are difficulties in producing the scheme and the memorandum of understanding. The House has a right to know what those difficulties are. The Opposition require a clear statement from the Minister on the state of the scheme and the memorandum of understanding and an explanation why he is not bringing them before the House.
The scheme, the memorandum of understanding, the capital structure, the valuation, contracts, pensions agreements, and tendering arrangements are all important aspects of the implementation of the Bill. Parliament is wholly in the dark about them. The Government will not tell the House about them, and therefore presumably they do not know the state of all those factors. It is unacceptable in a parliamentary democracy that the Government should completely scorn parliamentary scrutiny of their actions and the disposal of taxpayers' money. I trust that the House will carry the amendment.

Mr. Paddy Ashdown: On behalf of my colleagues, I also welcome the Minister to his new position. I congratulate him, or perhaps, as the hon. Member for South Ribble (Mr. Atkins) said, commiserate with him. It is a pleasure to follow the hon. Member for Stoke-on-Trent, Central (Mr. Fisher). The hon. Gentleman may like to know that the hon. Member for South Ribble nodded agreement with almost every point that he made, and I agreed with almost every point that the hon. Member for South Ribble made. How sad it 'was, therefore, to hear him make a speech in favour of voting for this motion and to hear him finish, presumably on the admonition of his Whip, by saying that he would vote with the Government on the amendment. Why can he not live up to the rhetoric and logic of his speech and the power of his constituents' views and go through the Lobby against the Government and in favour of the amendment?

Mr. Robert Atkins: The reason that I gave for supporting the Government was that in the final analysis I believed, and still believe, that my right hon. Friend's argument against delay has merit. In the circumstances, I prefer to vote for the motion in the interests of my constituents. None the less, I can still speak, as I did, of their worries.

Mr. Ashdown: I shall deal with the subject of delay, but the hon. Gentleman with his "on the one hand" and "on the other" made a speech that would have graced the Opposition Benches. Perhaps he would like to come across and join us.
I join the hon. Member for South Ribble in commiserating with the Minister on having arrived rather late in this complicated debate. Being charitable, that is no doubt why he believes that the subject is unimportant. I took care to note his words. We shall see in the Official Report whether I have them right. He said that the debate was somehow "disproportionate to the importance of the issue".
There may be those outside the Chamber who also believe that this is an esoteric matter, just another in the long list of the Government's privatisation schemes and not a matter of great importance, but it touches on the central issue, which is the coherence and effectiveness of our defence forces. It is something that touches every citizen. For reasons of pure dogma the Government are privatising an organisation which has been successful—the Minister said that — and was efficient during the Falklands campaign, which is not a drain on the public purse, and which contributed US$62 million last year to the public sector borrowing requirement. It is not an organisation which was nationalised by a former extreme Left-wing Labour Government; far from it. It is an organisation which has been in the ownership of the Crown


for the benefit of the nation for 400 years. It was nationalised by Henry VIII, as the hon. Member for Kingston upon Hull, North (Mr. McNamara) said.
Henry VIII was no Left-winger. His credentials could have put him on the Conservative Benches. Like Conservative Members, he was keen to abolish tiers of Government; in his case, mostly his Queens. Far from being a nationaliser, he was a privatiser, as the churches and monasteries found to their cost. He decided that the ordnance factories should be in the ownership of the Crown. That is what the Government are overturning in pursuit of their dogma.
The scale of the operation is large, and it has been conducted against the advice of Conservative Back Benchers. Former Conservative Ministers, including a former Secretary of State for Defence, have spoken against it. Under such circumstances, and given the size of the task, one might imagine that a Government with any circumspection might operate a little cautiously, but not so. We have before us a Bill of enablement which was referred to by my noble Friend Lord Diamond in another place as having a capital "E". It gives the Minister, as the hon. Member for Stoke-on-Trent, Central said, almost a blank cheque. The Minister can write any scheme that he likes.
My noble Friend Lord Diamond said:
In all my experience of legislation … I have never seen a Bill which consults Parliament so little, and indeed which scorns Parliament in the way it gives all powers to the Government and to the Minister and none to anybody else."—[Official Report, House of Lords, 19 July 1984; Vol. 454, c. 1635.]
Those were his words, and they are powerful enough.
The vital interest of large sections of our community and of our defence interests will depend upon the drawing up of the scheme which gives flesh and substance to the enabling Bill. In another place Lord Carver, a former chief of the general staff, said that he believed it would damage our defence capabilities. The vital interests of our services may be—I do not say that they will be—seriously affected by the nature of the scheme which the Minister has given himself full powers and a blank cheque to devise under this Bill of enablement. The hon. Member for South Ribble pointed out eloquently that the future of ROF employees could be affected deeply by the nature of the scheme which the Minister has given himself a blank cheque to write in any way that he desires. The services themselves, the defence organisation and our defence integrity could be affected by it. Suppliers and customers, both here and overseas, will also be affected, yet the Minister has free rein under this Bill of enablement to do precisely what he wants in drawing up a scheme.
When this matter was discussed in another place, the argument advanced by the Government spokesman was exactly the same as the one put forward in this House by the Minister. He said that the details were there for all to see and were well known, but that is far from the case. The problem is that none of the details of the scheme are known, and the Government have given us very little information on which to proceed.
No information has been released about the detail of the scheme. It has been promised, but it has never been delivered. It was promised by the hon. Member for Pendle (Mr. Lee) on 23 February. During the Committee stage, information was promised about patents and intellectual

property. The hon. Gentleman said that the list of between 200 and 300 patents and items which were patentable would be produced within two to three months. Having been made that promise on 23 February, we might have expected that information by the end of April, or at the latest by the end of May, but eight months later we have still not seen it.
The Minister says that he has nothing to hide. That may be so, but why has that information not been produced? If the Minister has nothing to hide, there can be only two possible answers: either the Secretary of State, who made the promise in the first place, was wrong, or his Department is so inefficient that it cannot honour his promise.
That was not the only occasion. We were also promised that a memorandum of understanding would be released, but it has not been. Again the Minister says that he has nothing to hide. Why, then, has that memorandum of understanding, which is so essential to our knowing the nature of the scheme, not been produced? If the Minister has nothing to hide, it can only be either that the Minister who made the promise was wrong or that his Department is so inefficient that it has been unable to produce it in line with his undertaking.
That is not the end of the story. Three months ago we heard from the Minister of State's predecessor that articles of association were "in final draft." We have not yet seen them. The Minister says that he has nothing to hide. If that is true, the only reason why we have not seen those articles which were in final draft three months ago is either that he was wrong in making that statement or that his Department was so inefficient that it could not honour it.
In those three key areas the Government have failed to live up to their undertakings. In those three key areas, if the Minister has nothing to hide, we have worse to fear, because either he was wrong in making those statements, or his Department was too inefficient to be able to honour them. In either case it seems to me that we have nothing to lose by inserting an extra safeguard by insisting on seeing some of the details which the Minister and his spokesmen have told us they would give us but about which we have heard no more. The House wishes to hear some of the details of the scheme which can have such a profound effect on the nature of our defence, on ROF employees and on all the other people involved.
I ask the Minister to explain the matter touched on by the hon. Member for South Ribble, who said that acceding to our request would result in delay. What have the Government to fear in allowing Parliament to scrutinise the details of this vital scheme? No one doubts that they will carry it when they produce it in the House, because they have a majority of 140. What will it cost them to allow the matter to be debated so that some flesh can be put on the scheme, and so that the House can see it and do its job properly? The delay involved will be one of two or three hours. I do not believe that the hon. Member for South Ribble, whose respect for the importance of the House is not questioned, can seriously suggest that the House should take so lightly its proper duties by attempting to scrutinise Government legislation in the absence of any of the safeguards given by the Government being honoured and in the absence of any details of the scheme.
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It is not exaggerating to say that the Bill is crucial not only to an established institution but to the nation's defence. What other job can the House have but to scrutinise such an important piece of legislation which can have such long-term ramifications? This is not a minor item. It is not, to use the Minister's words, an item which is disproportionate to the importance of this issue. With this legislation the Minister and the Government are attempting to abuse ministerial power. They are demonstrating their disregard, even scorn, of the functions of the House. That is why I and my right hon. and hon. Friends will vote in favour of the amendment. I call on Government supporters who served on the Standing Committee and who value the functions of the House to have the courage to do the same.

Mr. John Golding: It was an inspired act of mine to suggest to my hon. Friend the Member for Stoke-on-Trent, Central (Mr. Fisher) that he should serve on the Standing Committee which considered this Bill. We listened to a devastating attack by him against the Government's handling of this matter. However, I am not as charitable as my hon. Friend. Often during our consideration in Committee of the British Telecommunications Bill I had to chide him for being too soft on the Government. Tonight, despite a brilliant presentation of the argument against the Government, again he has not been as hard as he might have been.
The House would not pass the British TelecommunicationsBill without examining the licence. The Government were forced to bring the BT licence before the House and to have the detail of it debated before they could proceed with privatisation. What is more, the Government were shamed into producing the articles of association in a way that they ought to be shamed tonight into withdrawing their proposed motion.
We are talking about money. In this privatisation Bill the Government are attempting to steal money from the public purse. We are debating whether the Government are to be allowed to steal it in private behind locked doors and without being observed or whether they will have to put their hand in the public purse and steal in the full light of day. That is what the valuation and the rules of tendering are about. They are about Ministers being prepared to hand taxpayers' money over to private interests. That is what privatisation is about and that is what we are discussing.
It is essential that we see the scheme and the memorandum of understanding before privatisation is allowed to proceed.
I disagree with the hon. Member for Yeovil (Mr. Ashdown) in one respect. It is possible that the Government would have accepted the Lords amendment if it had said
subject to an affirmative resolution of the House of Commons.
They have a majority of 140 in the House of Commons. Even the hon. Member for South Ribble (Mr. Atkins), who totally disagrees with the Government—

Mr. Robert Atkins: No, I do not.

Mr. Golding: When speaking to his constituents, the hon. Gentleman totally disagrees with the Government.

Mr. Robert Atkins: The hon. Gentleman is being carried away by the exuberance of his own verbosity, but he must not misrepresent the truth. I was a supporter of the principle of the Bill from the outset and one of the

instigators of the privatisation of the Royal Ordnance Factories as long ago as two to three years before the Bill was introduced. There has never been any question about my commitment to the principle of privatisation. However, I remain concerned about aspects of the privatisation that fall upon my constituents and members of the work force. That is not to gainsay my support for the principle of privatising the ROFs.

Mr. Golding: We are not discussing the principle, because that was decided on Second Reading. If we were to be debating the principle now—

Mr. Robert Atkins: The hon. Gentleman is engaging in semantics.

Mr. Golding: —you, Mr. Deputy Speaker, would say: "The hon. Member for Newcastle under Lyme is out of order in talking about the principle. We are discussing whether the House will be"—

Mr. Deputy Speaker: Order. I suggest that the hon. Gentleman should bring himself within order.

Mr. Golding: We know each other, Mr. Deputy Speaker, and we respect each other. Having decided a principle—in my view, the House came to the wrong decision—we are now discussing whether we shall ever be allowed to debate the detail. The hon. Member for South Ribble did not direct himself to the principle. It was my impression that he did not agree with the Government on any one point of detail. He was speaking for his local newspaper and his constituency.
Despite what the hon. Member for South Ribble has said, the Government can depend on his vote. The Government are not worried about what will happen to the scheme or the memorandum of understanding in this House. Conservative Members such as the hon. Member for South Ribble who take an interest in these matters but disagree with the Government on detail will still vote with the Whip. I understand that. I have always voted with the Whip and I do not treat that as a practice to be scorned. I have never voted against the Whip and I understand why the hon. Gentleman and others will act likewise. I merely say that I understand that he will do so, and that I understand that the Whips will be pleased that he will. I understand also that the Whips will take the tally and will say, "Whatever the memorandum of understanding, and whatever the scheme contains, we can push them through the House." They know that they can separately push the scheme through the House in an hour and a half. The issue will be brought before the House on a Thursday night at half-past 11 and the payroll vote will get it through.
The Whips and the Government generally are not bothered about the House. However, they are bothered about the other place. They cannot whip the other place in the same way as they can whip this one. The hon. Member for Yeovil mentioned Lord Carver, of whom the Government are frightened stiff. Ministers do not know what they are talking about in terms of defence, but that cannot be said of Lord Carver.

Mr. Robert Atkins: Oh yes, it can.

Mr. Golding: There are some strange interjections from Conservative Members. Lord Carver said in another place that British tanks were Inadequate at the beginning of the second world war because they had been produced by private companies in a private enterprise system. He explained that he has had more confidence lately because


tanks have been produced by royal ordnance factories. If he were to repeat such arguments, he might well persuade their Lordships to throw out the scheme.

Mr. Deputy Speaker: Order. It is a long-held convention in this place that we do not comment on the proceedings in another place. It is in order for the hon. Gentleman to refer to the views of a Member in another place, but we do not comment on the proceedings of that place.

Mr. Golding: I did not want for one moment to refer to the proceedings in another place, Mr. Deputy Speaker. I think that it is a legitimate argument against the Government to say that they are frightened of a defeat in another place. There is no doubt in my mind about that. The Government have chosen to disagree with the other place because it was probably said, "We shall give you the Bill. We shall give you the principle, on the understanding that you come back to us with the detail." That was a rational attitude, but what would have happened if Ministers had said, "We shall not let you consider the detail."? Would the Government have secured the Bill if that had happened? That answer is no, for the reasons that my hon. Friend the Member for Stoke-on-Trent, Central and the hon. Member for Yeovil have given.
The Bill is about the security of the nation; if the Government get the scheme wrong and the understanding wrong, they will put the nation's security at risk, which of course we do not want. That is a matter of sufficient importance to demand that the detail be debated in the House and in another place before the Government proceed to privatisation.
There are other arguments; my hon. Friend the Member for Stoke-on-Trent, Central has advanced some of them. It is exceedingly important to the staff that the details of the pension arrangements be settled. It is exceedingly important that redundancy arrangements be settled. It is not sufficient for Conservative Members to say, "I accept the principle." It is important that they should say, "Even though we accept the principle, it is important that we consider the detail." It is important that my right hon. and hon. Friends accept the decision of the House, but that does not mean that we should refrain from discussing the detail.
We are dealing with the lives of working people and they cannot be brushed on one side as the Minister would wish. That cannot be treated as of no consequence. He must not say that the debate is unimportant. To many, the debate about detail is more important than the debate about principle. That is true of many of my constituents and many of those in the constituency of my hon. Friend the Member for Stoke-on-Trent, Central.
The index-linking of pensions is extremely important. I find it difficult to explain to my constituents who work at ROF Radway Green that there will be no index-linking under the privatisation of the ROFs while index-linking remains intact under the British Telecom legislation. That is the sort of detail that we should debate when we know finally what it is that the Government propose.
The Minister of State's contribution to the debate was unsatisfactory. I wish that the Under-Secretary of State had addressed the House immediately after his right hon. Friend resumed his place. If that had happened, we might have had something to debate. It would have been better

to have the answers to the questions. We could have debated those rather than wait until almost the end of the debate for the Under-Secretary to give his non-reply before the division. That would have been better than merely witnessing the use of the steamroller before leaving the House.
These arguments will not go away. The Government are acting in the most disreputable manner and they must not be allowed to do their shoddy work and shoddy deals in private without our having our say in the House of Commons.

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Mr. Bruce George: I share the sentiments of many previous speakers in this debate who have welcomed the Minister of State to the hot seat. I am rather less optimistic than my hon. Friend the Member for Kingston upon Hull North (Mr. McNamara), who believes that the adversarial relationship will run for years. I must tell my hon. Friend that the survival rate of Ministers in the Ministry of Defence is on a par with that of machine gunners during the first world war. The Ministry of Defence, which I have called the Bermuda triangle of Conservative politics, is one step removed from the House of Lords, oblivion in some other form, business and the door marked "exit". I am not entirely convinced that the Minister of State has security of tenure. Already, by his short speech he has placed himself in column inches well in front of most of his colleagues who were on the Standing Committee for 24 sittings. In comparison, his contribution so far has been monumental and majestic.
I could not understand the remarks of my hon. Friend the Member for Kingston upon Hull, North about the royal ordnance factories offices in Egypt. I have no objection to selling arms to our allies — they are all reasonable countries. Had the Egyptians been sensible enough to purchase some time ago fast fighting vehicles from the royal ordnance factories, the issues of their country, the middle east and Christendom would have been different. My hon. Friend is, however, more of a biblical scholar than I am.

Mr. McNamara: The issue was not that they had offices there but that they discovered that they had offices there.

Mr. George: I believe that the Minister of State makes a great mistake if he thinks that this amendment is a party issue. It is not. All hon. Members who have spoken so far have accepted that the issue of principle has been settled. The Minister must not assume that any request to delay is motivated even partly by party considerations. A House of Commons rather than a party issue is at stake. For a few seconds while the Minister was speaking, I felt rather guilty that apparently I had been involved in a process of delay and had been motivated by purely party political considerations. I felt that, in wanting to debate and scrutinise, we were somehow slowing the machinery of Government to an unacceptable level.
We must not assume that, just because we were engaged for 24 sittings in Standing Committee, there was adequate scrutiny. To debate is not necessarily to scrutinise adequately. If that were the case, in many ways we would be the most powerful legislature in the world. Those hon. Members who were on the Standing Committee will confirm that much of the information


given to them was bestowed late in the day. In some cases, as the sitting discussing a particular section of the Bill was unfolding, we were given the information, which meant that we had not time to scrutinise. In many ways, the Standing Committee was legislating in a vacuum. The Government were making things up as they were going along.
We complained repeatedly throughout the 24 sittings that we who were legislating and supposedly doing an important job were given grossly inadequate information. The Government said to us, "We cannot give you the information now because we have not made a decision." We were at least given the hope that at some stage in the not too distant future we as legislators would be given the necessary information upon which we could make rational decisions and with which we could adequately perform the task of scrutiny. That information has, however, not been given. To be told that to want the information before we make a final irrevocable decision is somehow to act unfairly and that we have had adequate time for consideration is to make a nonsense of the task of the House. Some Conservative Members must recognise that our point is a parliamentary point. I hope that at some time the roles will be reversed and that those who are prepared to shut their eyes to what is happening will suddenly become the defenders of parliamentary principle. The regrettable corollary of that point is that some people who defend Parliament might slip into the role of supporting realpolitik when finally making a decision.
The regrettable fact is that this afternoon we have been told that everything essential is already known. We are ignorant of so many matters involved in the privatisation of the royal ordnance factories, yet, at the end of eight or nine months, we are making a decision based on imperfect information. We have been told that the amendment is a delaying exercise. This afternoon, we have been told, "We have had enough talk." That statement comes ill from someone who has managed, because of other appointments, to miss out on most of this talk. The Minister is not in a good position to say that enough is enough and that we have had sufficient talk. We are doing the job that we are paid to do—scrutinising legislation. As has been said many times, this legislation will reverse 400 years of history. Asking for a delay of a couple of months, or even weeks, after such a lengthy period of royal and state control over the manufacture of armaments is not asking too much.
The Minister of State told the House that we cannot afford to risk further delay. What is the risk in further delay? There is no real risk, because the affirmative resolution procedure does not establish overnight that there will be real parliamentary scrutiny. We are asking the Government, after a reasonable interval when all the information is available to us, merely to present the information for debate. I should prefer the House to perform the real task of legislation and scrutiny and not to act simply as a rubber stamp or reactive legislature.
The Minister of State has coined a phrase that may enter some book of quotations or records. He said:
there are still some details to be resolved".
That must be the understatement of the year. An enormous amount of detail must still be resolved, but hon. Members will not be privy to that information. We shall consign this piece of legislation to the statute book, although many gaps will emerge. When the process is over and we ask

ourselves whether we performed the proper task of scrutiny, I believe, without any shadow of doubt, that we shall answer that we did not.
The fault lies not just on our shoulders. Hon. Members who have taken the trouble to be in the House have gone through the motions and have participated in the legislation that has been passed to the House for scrutiny, but those outside who have not been members of the Committee or have not participated in previous debates are, willingly or unwillingly, unfortunately colluding in a process of legislating by inertia. Parliament has slipped into its position of relative unimportance by incremental means—little Acts of Parliament passed with minimal scrutiny. Over centuries, that process amounts to an abdication of parliamentary control.
What are some of the gaps that must still be filled in by the Government? According to the Government, we know it all. The resilience of the parliamentary system — this shows not the resilience of the Standing Committee system but the potentiality of the Select Committee system—was shown by the fact that the Select Committee on Defence stopped some of the greatest inanities of the Government in dealing with privatisation. Other people were involved as well, but we must take an important share of the credit for considering the privatisation of security. We know, to our cost, the importance of security.
The Government planned to hand over the guarding of ordnance factories, including the factory at Enfield with its vast collection of small arms of enormous attraction to terrorists, to a private security firm. That was stopped. The Ministry of Defence police will remain within the ordnance factories, but for how long? What discussions have taken place with the MOD police? Is their presence at the ordnance factories merely a sop to parliamentary opinion which has objected to the privatisation of security? If the Bill goes through without an affirmative resolution procedure, will the Government then be able to pass the proposals which they have been unable to get approved during the last 12 months?
This is why the real details should be given to us before we finally pass this legislation. What will be the arrangements for the guarding of the ordnance factories after vesting day? That could be a short period. As we all know, the. Government would be elated if the opportunity were presented to them to flog off the ordnance factories in total or in part—or even to flog off the profitable parts and to let the weaker parts simply wither away despite their long record of service to the state.
What will happen to security after vesting day? What will happen to it when these factories are finally privatised? Will the MOD police remain, and for how long? If there is to be an ordnance factory security force, how will that differ from the existing arrangements'? Will it be at least as good as what now exists, even though in my opinion the current arrangements are inadequate`? Indeed, the Select Committee's report on Enfield clearly highlighted the inadequacy of the security arrangements when it visited that establishment a few months ago.
I am pleased to say that some of the more glaring deficiencies have since been remedied. But once the ordnance factories are privatised and the MOD police go, as I presume they will, what will be the training arrangements for the new ROF police force? For how long will those men be trained? Will they have access to arms? What will be the command and control arrangements?


Will they be trained alongside MOD police? Many questions have been asked which so far have remained unanswered.
The amendment will at least allow the House to be privy to Government thinking on security. I do not want to be held responsible for legislating away the ROFs and, as a result of Government action, for creating inadequate security arrangements. This House deserves proper assurances about security arrangements after vesting day.
There are still gaps in our information about the role and status of the agency factories. There are still gaps in our knowledge about the rights of the redundant. We heard a great deal in Committee about TUPE'81 — the Transfer of Undertakings (Protection of Employment) Regulations. We thought we were given assurances, but in recent weeks they appear to have been dissolving before our very eyes. We are entitled to know about redundancy and pensions.
We are told that the scheme is for conveyancing purposes only, but the Minister cannot have been around long enough or have read the Committee debates closely enough to appreciate the importance of the scheme. That scheme is not available to us. We are told that perhaps it will be available before vesting day. That is great news!
It seems that the Government will probably publish the details of the scheme just before the whole operation goes private. It is disgraceful that the scheme will not be made available to us before this passes out of the control of the House of Commons. It is disgraceful that the memorandum of understanding is not available. The Minister told us that some details still have to resolved but added, "But—tough luck—you will not have a chance to resolve them before the whole thing goes private".
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Why cannot we have access to the Coopers and Lybrand report which has apparently been commissioned to look at the valuation of assets? The Government have searched but apparently cannot find the information to present to us. It is therefore unsatisfactory for the Minister to say that everything essential is already known. The scheme must be laid before us. Even if the amendment is accepted, the amount of parliamentary scrutiny in which we will participate will be inadequate, but if it is carried there is at least the promise that this detail will be presented to us, albeit in a perfunctory debate lasting only one and a half hours.
The amendment, which I wholeheartedly endorse, strikes at the very heart of the legislative impotence of this House of Commons. We accepted the principle on Second Reading and have gone through Committee, and any further delay is to be regretted. We are becoming a reactive and rubber-stamp legislature. It is by no means only a party view that the Ordnance Factories and Military Services Bill should be subject to proper parliamentary scrutiny.
I am told that the Grant to Redundant Churches Fund Order 1984 is subject to the affirmative resolution. If the Government are prepared to apply the affirmative procedure to that, I am certain that a Bill such as this ought to be subject to the same kind of parliamentary scrutiny. By agreeing to the amendment, we shall be striking a blow for the legislature. The affirmative procedure means that the order must be approved by both the House of

Commons and the House of Lords before it can take effect. Should such an order be opposed, because of the Government's intransigence we shall regrettably have no further opportunity to debate the subject.
The general rule must surely be that, if an enabling Bill seeks the maximum parliamentary supervision, it should be laid in draft and not become active until approved by the House. If the Government desire to treat Parliament seriously, they will agree to the amendment.
We have been engaged in alleged scrutiny since the turn of the year. At a superficial glance that might appear to have provided the House with enough time to scrutinise this complicated legislation, but we must not be beguiled into thinking that time spent on legislation equals adequate scrutiny. If time was equated with scrutiny, we would have done our job, but having been involved in 24 sittings of the Standing Committee, I can testify to the fact that we were unable to do our job. By opposing the other place, which did an adequate job of scrutiny, and by opposing the amendment, the Government are showing their contempt for the House. I therefore hope—with little expectation of satisfaction—that enough Conservative Members will share our interest and concern, and will not see this as a narrow, partisan issue. I defy any Conservative Member to say that the speeches of Opposition Members have dwelt in any way on the principle of privatisation.
We must concede that this legislation will come into effect. We hope at some stage to be in a position to rectify it, but today we have been debating the scrutiny that has not been achieved. In those circumstances, I hope that hon. Members will agree to the amendment, as this legislation, which reverses many centuries of history, deserves proper scrutiny, and that has not yet been achieved by the House.

Mr. Peter Pike: I also send my good wishes to the Minister in his new post, although he has assumed it rather late in the Bill's passage. I, too, wish to speak in support of the amendment, which is both simple and important. I agree with my hon. Friend the Member for Walsall, South (Mr. George) that we are debating not a party political issue but one that should be supported by all hon. Members. It concerns the right of this House to know exactly what the legislation that we are being asked to approve means and our ability to scrutinise it. Therefore, I believe that hon. Members on both sides of the House should support the amendment.
The Bill's progress has demonstrated that the right stand was made when we originally debated the amendment in Committee on 31 January. It is now about 10 months since the Bill had its Second Reading shortly after the Christmas recess. Then, many hon. Members said that we did not have sufficient information and that we were debating a blank cheque. Even at this late stage we regrettably still find that several items have not been finalised, such as the memorandum of understanding, the question of valuation principles, and the report from Coopers and Lybrand. Perhaps the report has been finalised recently, but the decisions are not known to hon. Members. That is an important issue and we are entitled to know about it. Indeed, we are entitled to know on what basis the valuation has been made and what the Government will realise when privatisation takes place.
There are also items concerning the unions that have not yet been finalised, even at this late stage. I refer to redundancy and, more importantly, to pensions. The


Minister's undertakings in Committee still seem to be open to different interpretations. I understand the concern of workers that those items still have not been resolved. Indeed, there is still considerable concern among the work force at the Blackburn factory as a result.
In Committee, we were given an undertaking that the scheme would be available within four weeks at the latest after vesting day. But in Committee the Under-Secretary of State and the Minister several times assured us that the vesting day of 1 October was reasonable and would be achieved. We said that we did not believe that 1 October was feasible and that it would not be attained. We have, of course, been proved correct and we are now talking about 16 November. Even that date is hypothetical, and vesting day may well not be until next year. However, if the original vesting date had been attained — the Minister said that an answer in July stated that the scheme would be published within four weeks of the vesting day —the scheme would have been out by now, as it is virtually four weeks since that vesting date. The scheme should certainly be available next week. Indeed, we hope to see it as soon as possible.
Nevertheless, the important factor is the right of the House to know exactly what it is being asked to approve. I accept that we cannot debate privatisation tonight. That principle was established on Second Reading, albeit that we were, and are, opposed to it. Nevertheless, we must accept that privatisation will take place. However, we have the right to know about the scheme, and the method of valuation and to know that the right agreements have been reached with the trade unions. We have the right to know that the work force is happy with the situation that will face it after vesting day. That is why hon. Members on both sides of the House should support the amendment.
Even at this late stage I hope that the Minister will have second thoughts, and accept that our case is reasonable and fair. It was a matter of some concern to me that earlier tonight he seemed to believe that the time factor was more important than the democratic rights of hon. Members to know exactly what they are being asked to approve of. Surely it is only right and proper that we should have the right to consider the scheme, debate it and to use the affirmative resolution procedure. The delay in parliamentary time needed would be minimal. Members of both Houses should have the opportunity to know exactly what they are agreeing to. The delay is not important, but the principle is. We should have that opportunity and we should protect the interests and rights of hon. Members on both sides of the House and from both Chambers.

Mr. Denzil Davies: We welcome the Minister to the debate and to his new responsibilities. However, he made rather heavy weather of his opening remarks. It is not a delaying amendment. By "delay", what is meant is, at most, one day's debate in this House—or even half a day. Indeed, we are quite prepared to debate the matter from 4 pm to 7 pm. There could be half a day's debate in this House and half a day's debate in the other place. That is one day's debate on a very complicated scheme. Therefore, when the right hon. Gentleman talks about delay, he is on very weak ground.
We must again ask why the Government are so worried about having a three-hour debate on a scheme which is complicated, and which involves the transfer of public assets at certain values — valuation is extremely important — into a company which, although initially

owned and controlled by the Ministry of Defence and the Government, will later be sold to private interests with all the problems and public interest involved. Why can we not have three hours' debate in this House on that important scheme?
The scheme is described as a conveyancing arrangement. I do not know who decided on that phrase. If that is all that the scheme involves, why has nothing been done before? I understand that there are great difficulties in deciding what should be included in the document. There are many difficulties in deciding on valuation and many other aspects. We are discussing not a conveyancing device, but the heart of the Bill. The Bill has no other heart.
6.30 pm
My hon. Friend the Member for Walsall, South (Mr. George) and others mentioned Henry VIII. This is a Henry VIII Bill. Basically it is a one-clause, skeleton Bill. There is nothing else in the Bill. The Minister may think that later clauses are important, but they are mere padding. 'The Bill is about clause 1(1) which begins:
The Secretary of State may make a scheme".
That is the end of it. The rest of the Bill is draftsmen's padding. The Government apparently do not want to appear to be introducing a one-clause Bill.
The scheme is at the heart of the Bill and determines everything. That is why we want a proper debate. The Government could have avoided the argument over the amendment by telling the House what the scheme involves. They could have circularised hon. Members with the details and we could have debated the scheme this afternoon, or even earlier in Committee. All that we are asking is to see the scheme. That is not too unreasonable. We may agree or disagree with parts of it. Certainly we do not accept the principle of the Bill, but we accept that the Government will carry the day on that. We are now talking about the detail, which is extremely important not only for ordnance factory workers but for hon. Members and the public.
One does not have to be a clairvoyant or a brilliant lawyer to work out what will be in the scheme. It will have to set out the property and rights of the trading fund and the property and rights that will be transferred from the trading fund to the company. It will also have to set out the property and rights that are not appropriated to the trading fund. We have heard about railway wagons and all sorts of bits and pieces all over the place that are used by ordnance factories but which are not appropriated in an accounting sense to the trading fund. There must be a long list? Why can we not be told what is on that list. Why can we not be told which properties are being transferred? That is all that we want to know.
Another problem is that of intellectual property rights. It is no argument to say that the problem is easy. It is not. The question of patents and whether the Ministry of Defence retains rights in patents, designs, know-how and licences is complicated. Hon. Members are adult and knowledgeable enough to debate such matters and decide whether they like the scheme.
We did not debate the agency factories in detail in Committee. Perhaps that was our fault, but three factories are privately owned and will be supplying, as they have in the past, products such as hard alloys to the ordnance


factories. What will be the future relationship between the new limited company and those factories? Why can we not be told so that we can make up our minds?
Test ranges and proof facilities also create difficulties. Royal ordnance factories have been allowed to use test facilities owned by the Ministry of Defence, presumably free of charge. What will happen in future? Will a private company listed on the stock exchange and sold to private owners have the same relationship with the Ministry of Defence? I assume that the new company will still have to use the same facilities. How will that be worked out and what will the charge be? How will the Ministry determine the cost of allowing a private company to test shells on a Ministry range? The House should be allowed to debate such matters. If we do not debate them, no one will. That is the tragedy in the Government's attitude. I hope that they will change their mind. The Government are not prepared even to allow us to debate such matters in the House although the House is responsible for deciding whether to transfer the assets to private persons.
We debated valuation many times in Committee, but we did not achieve satisfaction. Valuation is not as easy as Ministers try to pretend that it is. The scheme will have to include principles of valuation as well as value itself. Will the assets be transferred without a value attached to them? Will land, patents and liabilities be transferred without value, or will each asset be valued? Will the scheme include principles of valuation? Will it contain that extraordinary concept of "usefulness" to the company? Is that Coopers and Lybrand's valuation principle? Does it base value on the usefulness of a company? I have never heard of that before.
I thought that valuation was assessed according to market value—the Government should appreciate that—and on what an asset may fetch in the market place? I see that the Under-Secretary is nodding. I am glad that he agrees. Usefulness is a vague concept. I prefer market value, which is a tested form of valuation. The term "usefulness" seems to be a cloak for an arbitrary value. It will be difficult and take a long time to value all the assets because no one has valued them before. They have been put into the trading fund at any old value.
Valuing the assets properly is important. Once a valuation is made it will stick. When the publicly owned company is sold on the stock exchange, the valuation will still stick. It must be right. If it is much below market value, the public will be robbed. If the company is sold at too low a valuation, the public will lose money and private interests will gain.
Will all the assets be valued in money terms? Will the pounds and pence be set out in the scheme? Will we then be able to tot up the valuations to see whether the public interest has been protected?
The Government could have avoided these problems if they had accepted the amendment and said, "Here is the scheme. We have done our best. We understand the problem, but we are honest, clear and clean with the House of Commons." That is all that we ask. The amendment is not partisan; it is not meant to delay. We shall not stop the Bill because of an argument about a three-hour debate on an affirmative resolution. The Government know that very well.
The Under-Secretary is a reasonable man. He tried to meet our points in Committee as much as he was allowed.

Why does he not agree that this is a perfectly reasonable demand, and say that as the other place has seen its reasonableness, the Government will allow the House of Commons three hours to debate the scheme that the Government are drawing up? He may say that he cannot do that, so I shall ask him to do something else. Will he give us an assurance that there will be a debate in the House before any private capital is injected into the ROFs or any shares sold off? The House is entitled to look at the matter again in the light of what the scheme contains. The House should be able to see what is being sold and what price the Government are getting for public assets, and we should be able to understand what is happening to the ROFs.
We are concerned about the people who work in the factories, but I shall not go into that now, because we shall debate it on another amendment. There is a great deal of concern, which is partly caused by privatisation. People are worried. The morale that has been so high in the ordnance factories for so long is now low. The ROFs have one of the best work forces of any establishment. However, the workers see their jobs going, and they fear that the 1,700 redundancies in the pipeline are merely the start. Those redundancies may not be caused by privatisation, but many future redundancies will be caused by privatisation.
The privatisation of these factories will lead to a massive job loss, and a loss of the skills of the people who work in the factories. Those skills will be lost to our economy for ever, because there is nowhere in civilian manufacturing industry, as a result of lack of growth in the economy, where such skills can be utilised. We shall lose the skills of a generation of people who have worked for their industry and the defence of their country. The Government owe them a little more than telling us that the amendment is a delaying amendment. We are merely asking for a proper debate on a scheme that transfers people from one place to another.
It is no good the Minister looking surprised. This scheme transfers people from the Civil Service to a company. It may be done under TUPE '81, but such people will be transferred from Government service. Why can we not debate that?

Mr. Butler: The right hon. Gentleman may be setting scares running through the work force. He said that it was being moved from one place to another, and that is not intended. However, he is right to say that the status of such people will change.

Mr. Davies: That is what I said. If that was loose language, I shall be more precise. The place from which these people are being transferred is the Civil Service and the place to which they are being transferred is the company. The scheme shifts 18,000 people. Why can we not debate it?

Mr. Golding: If redundancies follow, as the hon. Member for South Ribble (Mr. Atkins) fears, will there not be a transfer from one factory to another?

Mr. Robert Atkins: I did not say anything like that.

Mr. Golding: The hon. Gentleman did.

Mr. Davies: I shall not follow that, although my hon. Friend has made a good point. We can discuss this on a later amendment. There is a special problem of redundancies within the new organisation.
My point is that we are transferring not only land and intellectual property, but people, although that may not be set out in the scheme. We should be able to debate the conveyancing mechanism that shifts these 18,000 people. I hope that the Under-Secretary will reconsider the "Resist" that he has on his brief. This is the last day on which he can have a fling. Why does he not worry about civil servants for a change? Most of his Ministers are abroad selling arms anyway, so he can have a fling and accept that the House of Commons should have three hours to debate the scheme.

The Under-Secretary of State for Defence Procurement (Mr. John Lee): We have had a long debate, in the course of which a very large number of different issues have been raised by hon. Members of all parties. Although we are discussing an amendment to the Bill, the debate has seemed at times more like a Second Reading debate. Of course, it was inevitable that this would happen, given the terms of the amendment that we have been discussing.
A debate on the scheme to be made under the Bill would be nothing but a repeat of what has been heard in the House this evening. The debate would not be confined to the scheme. Indeed, when the scheme is published hon. Members will find that it is a limited document, because it does not deal with more than a small fraction of the issues with which we have been concerned during the past two hours or so. Any debate held on the scheme would inevitably spill over into other matters of greater interest, and, indeed, consequence. What will not be contained in the scheme is, in general, of greater interest to the House than what will be in it, and it is inevitable that any further discussion on the scheme will turn out to be a repeat of today's performance.
My right hon. Friend the Minister of State for Defence Procurement said in his opening speech that we had had all the discussion that we need.
The hon. Member for Walsall, South (Mr. George) drew the attention of the House to the fact that we had had 24 sittings of the Committee. I shall attempt to answer the various points made in course of our debate, but very little that I shall say will be new. Nearly all of it has been said before, on Second Reading, in Committee, and on Report. The reason why it will not be new is that the Government have already made to the House a very full disclosure of their intentions. The scheme, when published, will not add to what is already well known about what the Government plan to do, but so that we may have the opportunity, in effect, to hold this same debate once more, we are to risk further delays to vesting day and postpone the time at which the new company can get down to doing what it is intended to do. That is why we disagree with the amendment.
I shall now deal with the details of the debate. The hon. Members for Stoke-on-Trent, Central (Mr. Fisher) and for Kingston upon Hull, North (Mr. McNamara) and others have talked about "the scheme" and "schemes". The scheme is the means by which property rights and liabilities are transferred from the ownership of the Secretary of State to the new company. The scheme avoids the need for any further conveyancing documents and can thus greatly simplify the transfer of property. It also binds both parties in the way in which an ordinary conveyancing

transaction could not do. The corollary is that any person adversely affected by the transfer may claim compensation from the Secretary of State.
The scheme consists largely of a short operative part and a number of schedules. All the property rights and liabilities to be transferred will be listed in the schedules. The operative part of the scheme will provide for the transfer of the property, rights and liabilities so listed, and will stipulate the number of nominal value shares to be issued by the company in consideration of the transfer.
The scheme will also set out the relationship between the distributable and non-distributable reserves of the company. It will not include details of pension schemes. The scheme will also not set out the actual value of the new company. This will be done in the opening balance sheet, to be published as soon as possible after vesting date. However, the scheme will contain among its schedules a statement of the principles of valuation that apply, and the actual valuation, which will be carried out by accountants and others expert in this subject.
Further schedules will contain the terms and conditions on which intellectual rights will be transferred to the new company, details of certain contracts that are to be executed after vesting day by the Ministry of Defence and the new company, and the way in which certain books and records of interest both to the company and the Department, will be dealt with. The first scheme will be laid before Parliament in accordance with clause 3(9) well before vesting day itself. It may be necessary to exclude some matters on grounds of national or commercial security, but the exclusions will be kept to a minimum. The scheme will, of course, be scrutinised by the Public Accounts Committee.

Mr. Denzil Davies: Will the monetary value of the property, rights and assets to be transferred be listed alongside them in the document?

Mr. Lee: I am just about to deal with valuation. All the assets that are to be transferred to the company will be valued and we shall have the benefit of professional advice in the valuation exercise. The schemes transferring the assets will contain an explanation of the basis of valuation. Fixed assets will primarily be transferred on a depreciated cost basis.
Assets such as work in progress cannot be valued in advance and the valuation exercise will, therefore, not be completed until after vesting day. The precise valuation of those assets will probably not be known for two to three months after that date. Where book values are nil or only a nominal value applies, an economic value may have to be determined. That is what we have termed "usefulness".
A closing balance sheet of the ROF trading fund will be prepared and audited by the National Audit Office and published. An opening balance sheet of the new company will be published as soon as possible after vesting day. Publication of the opening and closing balance sheets is important, so that Parliament will be able to look at both of them and have any discrepancies between the two explained. It will be for the Secretary of State to satisfy himself, so that he can satisfy Parliament, that full value in terms of the issue of securities in return for assets transferred has been secured for the taxpayer.
A number of hon. Members have mentioned the Coopers and Lybrand report. Coopers and Lybrand has been producing long form reports on all divisions of the


group and on the group as a whole. They are being used in the production of a company business plan. None of the information in those documents will be in the scheme or be made public—they are commercially confidential—but the information, updated, will be used for prospectus purposes when we move to flotation. The yellow book rules of the stock exchange will then apply.
Valuation principles are not the subject of the Coopers and Lybrand report. They are for discussion between the Ministry, the Treasury and the ROFs, in which Coopers and Lybrand is retained as adviser.

Mr. Denzil Davies: Will the hon. Gentleman answer my question? Will the schedule include the money values of the assets being transferred? Will the value of plant and machinery, Land or intellectual property be set out? The answer must be yes or no.

Mr. Lee: The answer is no. I shall come to the specific point about intellectual property.
The new company will obtain services and facilities from the Ministry. They will be provided on an arm's length basis, in the same way as they would be provided to any other company seeking to use Ministry facilities, such as the proving ranges. They will be governed by contracts and the full cost of the services will be recovered. If the ROF company prefers, it will be free to provide its own facilities or to obtain them elsewhere. That will be a decision for the company.

Mr. Robert Atkins: Will my hon. Friend mention the preferred source arrangement, which is part and parcel of the problem to which the right hon. Member for Llanelli (Mr. Davies) referred?

Mr. Lee: The preferred sources arrangement is gradually being phased out and will certainly have ended before vesting day when we move to a policy of competition.
Most people assume that preferred sourcing will always work to the disadvantage of the ROFs, but it will work to their advantage in some cases because they will be able to participate in the tendering for certain contracts from which they were originally excluded.
The right hon. Member for Llanelli (Mr. Davies) mentioned the property in Egypt. The offices are loaned by the Egyptian Government and the only trading fund assets are are some filing cabinets, a typewriter, an air conditioning unit and a car. It is expected that those assets should not prove too difficult to value.
The right hon. Gentleman also mentioned the 600 railway wagons. They are jointly owned by the ROF trading fund and the Ministry. Their future management and deployment—not their ownership—is being studied.
I was asked about the agency factories. The three agency factories at Powfoot, Featherstone and Summerfield are managed in accordance with agreements that define the terms of the agency. Those agreements will be transferred to the ownership of the new company by the scheme. Therefore, the management of those factories will not change, and nor will the basis on which they operate.
The articles of association are available. They are filed at the companies registry in Cardiff, but contain only basic detail. I shall ensure that a copy is made available in the Library.
Intellectual property rights include patents, registered designs, trade marks, copyrights, other property rights in inventions, designs, drawings and technical information. It is essential that the new company secures access to the IPRs that it will need to carry on its work. It has been decided that outright ownership of the IPRs, rather than a mere licence to use them, would benefit the company, by making it self-sufficient and securely established in its field.
The IPRs will be transferred to the holding company by the initial scheme, which will come into effect on vesting day. The group structure of the new ROF organisation will mean that the subsidiary companies of Royal Ordnance plc will be able to use the relevant IPRs freely. The Ministry will retain free rights in the IPRs transferred. In addition to specific reservations in favour of the Ministry, the Crown possesses a statutory right to use any patent for Government purposes. Finally, the rights of employees in respect of intellectual property will not be affected by the transfer.
I was asked about the list of the IPRs. That is being prepared and, subject to the caveat of security, will be published in the spring.

Mr. Ashdown: In February the Minister promised us that list within two or three months. Now he says that he will publish it in the scheme, which will not come out until vesting day. How does he square those two statements?

Mr. Lee: We hope that vesting day will be fairly soon anyway, but the ROFs have a long and distinguished history and there are several hundred IPRs to be dealt with. The work is well under way.

Mr. Fisher: Will the Government be giving a cash value to the intellectual property rights, and will they be specified on publication of the scheme? The Minister made an extraordinary admission when he said that all these public assets were being transferred without a single cash value being attached to them. Have even the principles of valuation been established? The hon. Gentleman referred to them, but it does not appear from what he said that the Ministry yet knows what those principles will be.

Mr. Lee: I understand that no specific valuation will be placed on the IPRs, because they will be transferred to the new holding company, which needs them to generate future trade, turnover and profits.
When we move towards privatisation, which we have always said is most likely to be carried out through a flotation — probably in 18 months to two years — the business will be valued on some form of earnings basis.

Mr. Denzil Davies: On an asset basis.

Mr. Lee: No, not on an asset basis. The assets will obviously be taken into account, as will the IPRs. Essentially, those rights are needed to generate turnover, revenue and profits.
I do not want to deal with pensions on this amendment, but I shall try to answer the question put to me by my hon. Friend the Member for South Ribble (Mr. Atkins). I know about his interest in the matter, because I visited his local factory at Chorley at the end of last week. A period of grace will be allowed in which employees can make up their minds whether to transfer accrued benefits. It may not be as much as six months, but it will be a reasonable period.

7 pm

Mr. Straw: I have been trying to digest the Minister's words about intellectual property rights. Is it not the case that intellectual property rights will be among the principle assets of the new, privatised, hived-off ROFs? I am thinking of what the factories design and make on the basis of what people have thought out. Is it not scandalous that a low cash value should be put on the fundamental asset of the organisation?

Mr. Lee: No, it is not. The vast majority of companies do not carry such assets—the IPRs and patents—in their own balance sheets with a high value on them. Most companies write such things down to a very small figure. It is essential that the companies should retain them, because it is from the IPRs, the expertise and skills, the personnel, and patent rights that turnover, revenue and profits are generated. Ultimately, the valuation of the individual ROF subsidiaries and the whole flotation will depend on the earnings generated from the IPRs. Valuation will come through in overall terms and will flow back to the taxpayer.
Finally, I move to the question of ROF security, which has engendered considerable interest. The hon. Member for Walsall South, specialises, in the nicest way, in this subject. We have taken powers in the Bill to enable the MOD police to remain at ROF sites for as long as we consider necessary, but in the longer term we intend that the ROF's will set up their own company guard force to take up the responsibility of guarding ROF premises where this is considered appropriate.
A number of detailed questions have been asked about the organisation and training of the new company guard force. I am afraid that it is still too early to give full answers to these questions. The Ministry of Defence will be liaising very closely with the ROFs on the question of recruiting and training such a guard force, with the aim of creating a reliable and efficient system.
The new company guard force will not be armed, but I believe that the different value of the access of MOD police to firearms should not be over-rated. Security arrangements will have to be cleared with local police authorities, and contingency plans will be made for civil police support where necessary at each of the sites. There are arrangements for the civil police to draw arms should the situation so warrant, and contingency plans will include the possible need to call upon armed police.
As the new company guard force is built up, liaison arrangements with the existing MOD police guarding each site will be worked out. I should emphasise that MOD policemen will remain subject to the ultimate control of the Secretary of State for Defence and that command and control arrangements will reflect this chain of command.
The report of the Defence Committee recognised that decisions about the withdrawal of MOD police from the less sensitive sites would need to be taken on a case-by-case basis, and that at some ROF sites the police could sensibly be withdrawn. Schedule 3 to the Bill gives us the flexibility to take these decisions as circumstances —including threat assessments—warrant.
The Government will be submitting their observations on the Defence Committee report shortly, but no final decisions have yet been taken, and we will be examining the security questions most carefully over the next year or so.

Mr. George: I may have misheard the Minister. Is he saying that the new guard forces will not have access to arms? Even if they were swiftly called to the scene of a major robbery, the police could be five, 10 or even 15 minutes away. Surely there should be a proper deterrent force, and access to arms to deter potential terrorists should be a prerequisite for guarding arrangements.

Mr. Lee: On particularly vulnerable sites it is likely that our own MOD police will stay for a very long time and existing arrangements will continue to apply.
We have spent many hours in discussion—a couple of hours today, in Committee and on Second Reading. There has been consideration by both Houses. We have covered many aspects of privatisation. I now ask the House to disagree with the amendment.

Question put,

That this House doth disagree with the Lords in the said amendment:—

The House divided: Ayes 258, Noes 189.

Division No. 470]
[7.04 pm


AYES


Adley, Robert
Coombs, Simon


Aitken, Jonathan
Cope, John


Alison, Rt Hon Michael
Cormack, Patrick


Amess, David
Corrie, John


Ancram, Michael
Couchman, James


Arnold, Tom
Critchley, Julian


Ashby, David
Crouch, David


Aspinwall, Jack
Currie, Mrs Edwina


Atkins, Robert (South Ribble)
Dickens, Geoffrey


Baker, Rt Hon K. (Mole Vall'y)
Dorrell, Stephen


Baker, Nicholas (N Dorset)
Douglas-Hamilton, Lord J.


Banks, Robert (Harrogate)
du Cann, Rt Hon Edward


Batiste, Spencer
Dunn, Robert


Beaumont-Dark, Anthony
Durant, Tony


Bellingham, Henry
Dykes, Hugh


Bendall, Vivian
Eggar, Tim


Benyon, William
Emery, Sir Peter


Bevan, David Gilroy
Evennett, David


Biffen, Rt Hon John
Eyre, Sir Reginald


Biggs-Davison, Sir John
Fallon, Michael


Blaker, Rt Hon Sir Peter
Farr, Sir John


Body, Richard
Favell, Anthony


Bonsor, Sir Nicholas
Finsberg, Sir Geoffrey


Boscawen, Hon Robert
Forman, Nigel


Bottomley, Mrs Virginia
Forsyth, Michael (Stirling)


Bowden, Gerald (Dulwich)
Fox, Marcus


Boyson, Dr Rhodes
Franks, Cecil


Braine, Sir Bernard
Fraser, Peter (Angus East)


Brandon-Bravo, Martin
Galley, Roy


Bright, Graham
Garel-Jones, Tristan


Brinton, Tim
Glyn, Dr Alan


Brittan, Rt Hon Leon
Gow, Ian


Brown, M. (Brigg &amp; Cl'thpes)
Gower, Sir Raymond


Browne, John
Grant, Sir Anthony


Bruinvels, Peter
Greenway, Harry


Bryan, Sir Paul
Gregory, Conal


Buck, Sir Antony
Griffiths, E. (B'y St Edm'ds)


Burt, Alistair
Grist, Ian


Butler, Hon Adam
Grylls, Michael


Butterfill, John
Gummer, John Selwyn


Carlisle, John (N Luton)
Hamilton, Hon A. (Epsom)


Carlisle, Kenneth (Lincoln)
Hamilton, Neil (Tatton)


Carlisle, Rt Hon M. (W'ton S)
Hampson, Dr Keith


Carttiss, Michael
Hannam, John


Cash, William
Hargreaves, Kenneth


Chalker, Mrs Lynda
Harris, David


Channon, Rt Hon Paul
Haselhurst, Alan


Chapman, Sydney
Hayward, Robert


Chope, Christopher
Heathcoat-Amory, David


Clark, Sir W. (Croydon S)
Heddle, John


Clarke, Rt Hon K. (Rushcliffe)
Henderson, Barry


Colvin, Michael
Hicks, Robert


Conway, Derek
Higgins, Rt Hon Terence L.






Hill, James
Price, Sir David


Hind, Kenneth
Proctor, K. Harvey


Hirst, Michael
Raffan, Keith


Holland, Sir Philip (Gedling)
Renton, Tim


Hordern, Peter
Rhodes James, Robert


Howell, Ralph (N Norfolk)
Rhys Williams, Sir Brandon


Hubbard-Miles, Peter
Ridsdale, Sir Julian


Hunt, David (Wirral)
Rippon, Rt Hon Geoffrey


Hunter, Andrew
Roberts, Wyn (Conwy)


Jessel, Toby
Robinson, Mark (N'port W)


Johnson Smith, Sir Geoffrey
Rossi, Sir Hugh


Jones, Gwilym (Cardiff N)
Rost, Peter


Jones, Robert (W Herts)
Rumbold, Mrs Angela


Kershaw, Sir Anthony
Ryder, Richard


King, Roger (B'ham N'field)
Sackville, Hon Thomas


Knight, Mrs Jill (Edgbaston)
Shaw, Giles (Pudsey)


Knowles, Michael
Shaw, Sir Michael (Scarb')


Knox, David
Shelton, William (Streatham)


Lawrence, Ivan
Shepherd, Colin (Hereford)


Lawson, Rt Hon Nigel
Shepherd, Richard (Aldridge)


Lee, John (Pendle)
Silvester, Fred


Leigh, Edward (Gainsbor'gh)
Sims, Roger


Lennox-Boyd, Hon Mark
Smith, Sir Dudley (Warwick)


Lewis, Sir Kenneth (Stamf'd)
Smith, Tim (Beaconsfield)


Lightbown, David
Soames, Hon Nicholas


Lilley, Peter
Speller, Tony


Lloyd, Ian (Havant)
Spence, John


Lloyd, Peter, (Fareham)
Spencer, Derek


Lord, Michael
Spicer, Jim (W Dorset)


Luce, Richard
Spicer, Michael (S Worcs)


Lyell, Nicholas
Squire, Robin


McCrindle, Robert
Stanbrook, Ivor


McCurley, Mrs Anna
Stern, Michael


MacGregor, John
Stevens, Lewis (Nuneaton)


MacKay, John (Argyll &amp; Bute)
Stevens, Martin (Fulham)


Maclean, David John
Stewart, Andrew (Sherwood)


McQuarrie, Albert
Stokes, John


Madel, David
Stradling Thomas, J.


Major, John
Sumberg, David


Malins, Humfrey
Tapsell, Peter


Malone, Gerald
Taylor, John (Solihull)


Maples, John
Taylor, Teddy (S'end E)


Marland, Paul
Temple-Morris, Peter


Marlow, Antony
Thomas, Rt Hon Peter


Mates, Michael
Thompson, Donald (Calder V)


Mather, Carol
Thompson, Patrick (N'ich N)


Mawhinney, Dr Brian
Thorne, Neil (Ilford S)


Mayhew, Sir Patrick
Thurnham, Peter


Merchant, Piers
Townsend, Cyril D. (B'heath)


Meyer, Sir Anthony
Twinn, Dr Ian


Miller, Hal (B'grove)
van Straubenzee, Sir W.


Mills, Iain (Meriden)
Vaughan, Sir Gerard


Mills, Sir Peter (West Devon)
Waddington, David


Miscampbell, Norman
Waldegrave, Hon William


Mitchell, David (NW Hants)
Walker, Bill (T'side N)


Moate, Roger
Wall, Sir Patrick


Monro, Sir Hector
Waller, Gary


Montgomery, Fergus
Walters, Dennis


Morris, M. (N'hampton, S)
Ward, John


Morrison, Hon C. (Devizes)
Wardle, C. (Bexhill)


Moynihan, Hon C.
Warren, Kenneth


Needham, Richard
Watson, John


Nelson, Anthony
Watts, John



Neubert, Michael
Wells, Bowen (Hertford)


Newton, Tony
Wells, Sir John (Maidstone)


Norris, Steven
Wheeler, John


Onslow, Cranley
Whitfield, John


Ottaway, Richard
Wiggin, Jerry


Page, Richard (Herts SW)
Winterton, Nicholas


Parkinson, Rt Hon Cecil
Wolfson, Mark


Patten, Christopher (Bath)
Wood, Timothy


Patten, John (Oxford)
Yeo, Tim


Pawsey, James
Young, Sir George (Acton)


Pollock, Alexander
Younger, Rt Hon George


Porter, Barry



Powell, William (Corby)
Tellers for the Ayes:


Powley, John
Mr. Ian Long and


Prentice, Rt Hon Reg
Mr. Tim Sainsbury.





NOES


Adams, Allen (Paisley N)
Hamilton, W. W. (Central Fife)


Alton, David
Hardy, Peter


Anderson, Donald
Harman, Ms Harriet


Archer, Rt Hon Peter
Harrison, Rt Hon Walter


Ashdown, Paddy
Hattersley, Rt Hon Roy


Ashton, Joe
Healey, Rt Hon Denis


Atkinson, N. (Tottenham)
Heffer, Eric S.


Banks, Tony (Newham NW)
Hogg, N. (C'nauld &amp; Kilsyth)


Barnett, Guy
Holland, Stuart (Vauxhall)


Barron, Kevin
Home Robertson, John


Beith, A. J.
Howells, Geraint


Bell, Stuart
Hoyle, Douglas


Benn, Tony
Hughes, Robert (Aberdeen N)


Bennett, A. (Dent'n &amp; Red'sh)
Hughes, Roy (Newport East)


Bermingham, Gerald
Hughes, Sean (Knowsley S)


Bidwell, Sydney
Hughes, Simon (Southwark)


Blair, Anthony
Janner, Hon Greville


Boothroyd, Miss Betty
John, Brynmor


Boyes, Roland
Johnston, Russell


Bray, Dr Jeremy
Jones, Barry (Alyn &amp; Deeside)


Brown, Gordon (D'f'mline E)
Kaufman, Rt Hon Gerald


Brown, Hugh D. (Provan)
Kennedy, Charles


Brown, N. (N'c'tle-u-Tyne E)
Kilroy-Silk, Robert


Brown, Ron (E'burgh, Leith)
Kinnock, Rt Hon Neil


Bruce, Malcolm
Kirkwood, Archy


Buchan, Norman
Lambie, David


Caborn, Richard
Leadbitter, Ted


Callaghan, Jim (Heyw'd &amp; M)
Lewis, Ron (Carlisle)


Campbell, Ian
Lewis, Terence (Worsley)


Campbell-Savours, Dale
Litherland, Robert


Canavan, Dennis
Lofthouse, Geoffrey


Carlile, Alexander (Montg'y)
Loyden, Edward


Carter-Jones, Lewis
McCartney, Hugh


Cartwright, John
McDonald, Dr Oonagh


Clark, Dr David (S Shields)
McKay, Allen (Penistone)


Clarke, Thomas
McKelvey, William


Clay, Robert
Mackenzie, Rt Hon Gregor


Clwyd, Mrs Ann
McNamara, Kevin


Cocks, Rt Hon M. (Bristol S.)
McTaggart, Robert


Cohen, Harry
Madden, Max


Conlan, Bernard
Marek, Dr John


Cook, Frank (Stockton North)
Martin, Michael


Cook, Robin F. (Livingston)
Mason, Rt Hon Roy


Corbett, Robin
Maxton, John


Cowans, Harry
Maynard, Miss Joan


Cox, Thomas (Tooting)
Meacher, Michael


Craigen, J. M.
Meadowcroft, Michael


Crowther, Stan
Michie, William


Cunliffe, Lawrence
Mikardo, Ian


Dalyell, Tam
Millan, Rt Hon Bruce


Davies, Rt Hon Denzil (L'lli)
Miller, Dr M. S. (E Kilbride)


Davies, Ronald (Caerphilly)
Mitchell, Austin (G't Grimsby)


Davis, Terry (B'ham, H'ge H'l)
Molyneaux, Rt Hon James


Deakins, Eric
Morris, Rt Hon J. (Aberavon)


Dewar, Donald
Oakes, Rt Hon Gordon


Dormand, Jack
O'Brien, William


Douglas, Dick
O'Neill, Martin


Dover, Den
Orme, Rt Hon Stanley


Duffy, A. E. P.
Park, George


Dunwoody, Hon Mrs G.
Parry, Robert


Eadie, Alex
Patchett, Terry


Edwards, Bob (W'h'mpt'n SE)
Pavitt, Laurie


Ellis, Raymond
Pendry, Tom


Evans, John (St. Helens N)
Penhaligon, David


Ewing, Harry
Pike, Peter


Fatchett, Derek
Powell, Rt Hon J. E. (S Down)


Faulds, Andrew
Powell, Raymond (Ogmore)


Field, Frank (Birkenhead)
Prescott, John


Fields, T. (L'pool Broad Gn)
Radice, Giles


Fisher, Mark
Randall, Stuart


Foot, Rt Hon Michael
Redmond, M.


Foster, Derek
Richardson, Ms Jo


Foulkes, George
Roberts, Allan (Bootle)


Fraser, J. (Norwood)
Roberts, Ernest (Hackney N)


Garrett, W. E.
Robertson, George


George, Bruce
Rogers, Allan


Godman, Dr Norman
Rooker, J. W.


Golding, John
Rowlands, Ted


Hamilton, James (M'well N)
Sedgemore, Brian






Sheerman, Barry
Tinn, James


Sheldon, Rt Hon R.
Torney, Tom


Shore, Rt Hon Peter
Wallace, James


Short, Mrs R. (W'hampt'n NE)
Wareing, Robert


Silkin, Rt Hon J.
Weetch, Ken


Skinner, Dennis
Welsh, Michael


Smith, C.(Isl'ton S &amp; F'bury)
White, James


Smith, Rt Hon J. (M'kl'ds E)
Williams, Rt Hon A.


Snape, Peter
Wilson, Gordon


Soley, Clive
Winnick, David


Spearing, Nigel
Winterton, Mrs Ann


Steel, Rt Hon David
Woodall, Alec


Stewart, Rt Hon D. (W Isles)
Young, David (Bolton SE)


Stott, Roger



Straw, Jack
Tellers for the Noes:


Thomas, Dr R. (Carmarthen)
Mr. John McWilliam and Mr. Frank Haynes.


Thompson, J. (Wansbeck)



Thorne, Stan (Preston)

Question accordingly agreed to.

Lords amendment: No. 2, in page 1, line 9, leave out "or to different companies"

Mr. Butler: I beg to move, That this House doth agree with the Lords in the said amendment.
Before I explain why the Government have had what might appear to be a change of heart, I wish to thank the right hon. Member for Llanelli (Mr. Davies) and other hon. Members for their kind remarks about me. The arrows were somewhat barbed by the time they reached me, but I appreciated the sentiments.
The House may wonder why we are asking it to agree to this amendment when we asked it to disagree with the previous amendment. The effect of the amendment would be to restrict the power of my right hon. Friend to transfer property rights and liabilities by an initial scheme to more than one company. The Government have been concerned to ensure maximum flexibility in the operation of the powers conferred by the Bill. The establishment of the ROFs as an independent commercial company necessitated the making of many decisions on the form and structure of the new organisation.
When the Bill was introduced, no decisions had been taken whether the most favourable structure would be a single company organised in divisions, a holding company with subsidiaries or a number of separate, autonomous companies. The Bill was drafted with commendable prudence to enable any of those possible courses to be taken in the light of further consideration.
I know that the employees of the ROFs have always been concerned that the organisation should continue to operate as a whole after it is established as a public limited company. We have attached particular importance to that concern as it came from those most directly affected. Nevertheless, it was also the case that commercial considerations could suggest an organisational structure which conflicted with the one company approach. In Committee we resisted an amendment on similar lines, and, indeed, we resisted this amendment in the other place.
On 24 July my hon. Friend the Member for Chertsey and Walton (Mr. Pattie) announced that the Government would ask the House to disagree with the amendment when the Bill returned to this House. However, we have reconsidered the matter. The company structure which we have decided on as the best one to meet all relevant considerations is that of a holding company and subsidiary companies. The subsidiary companies will, however, act only as divisions of the holding company. They will be

agent subsidiaries, and no property will be vested in them. They will trade not on their own account, but on behalf of the holding company. Strictly speaking, the profits they make will be not their own profits, but those of the holding company. This structure will enable the group to be managed as a whole. Decisions affecting the whole will be taken centrally, but decisions affecting only one or other of the divisions can be taken and implemented locally. We believe that this structure provides the best combination of central and devolved management.
Consequently, all ROF trading fund property will be vested in the holding company. The Government are therefore now willing to accept the amendment. We recognise that in making the initial scheme, my right hon. Friend the Secretary of State will be constrained to transfer property from the trading fund to one company only. That is what he intends to do, and the Government are willing that that intention should be given legislative form. The employees of the royal ordnance factories, and others, can now be assured that the transfer of assets from the trading fund will not result in a break up of the existing organisation. We hope that the Government's acceptance of the amendment will be welcomed by those who have doubted our intentions in the matter.
I must, however, make it clear to the House that acceptance of the amendment does not necessarily mean that my right hon. Friend will not at some time in the future be able to transfer property from the holding company to another, whether that other is one of the existing subsidiaries, or a different, quite separate, company. There is nothing in the amendment to prevent that from being done. The power to transfer property by a subsequent scheme from a company which received it under an earlier scheme to another company is contained in clause 1(1)(b). The amendment to subsection (1)(a) does not affect that power.
It is important to mention this to avoid any future misunderstandings. The Government are willing to accept, the amendment and to submit to a formal constraint on the ambit of the initial transfer. Once the royal ordnance factories are established as a single commercial entity, however, there must be freedom to take account of commercial considerations.
As for the eventual means of privatisation, it is only prudent to retain flexibility. However, there is no present intention, nor present expectation, that any part of the existing organisation will be sold off separately. We have said, and I repeat, that the most likely method of introducing private capital into this venture is by way of a flotation of shares in the whole. The timing will depend on many factors, and it is impossible at this stage to be precise about it. Above all, the company — its management and work force — will have to come to terms with the challenges and opportunities of a truly commercial environment.
With that brief explanation, I commend the amendment to the House. I hope that my hon. Friends and Opposition Members will support it.

Mr. Denzil Davies: I do not intend to be churlish, because the right hon. Gentleman made clear the limitations of the amendment. We welcome the Government's acceptance of the amendment, as far as it goes. As the Minister said, the amendment means that the


words "different companies" in the original Bill are unnecessary because the Government will transfer all the assets to one company.
With all the problems facing the Secretary of State of transferring all the assets to one company, I can see why the Government do not wish to transfer some assets to one company and some to another. The problems of evaluation would be even greater than they are now. Expediency triumphed in this case. I accept that everyone will be pleased about that, but we all know that the day after vesting day the Secretary of State can do what he likes. He owns all of the shares and the Bill deals only with what happens up to vesting day. After that he has complete discretion.
When we debated the amendment in Committee, we did not press it to a Division. It was debated again in the other place and eventually accepted. The spirit, if that is the right word, behind the amendment was that the ordnance factories should not be broken up through privatisation by vesting day. The amendment cannot apply beyond vesting day, because that is as far as the Bill goes. We cannot provide for that in the Bill, and the amendment does not provide for it either.
Behind the amendment is the belief and conviction that, if the Government privatise the industry—we disagree with that—they must not sell off the ordnance factories piecemeal; for example, they must not sell off the ammunitions subsidiary separately. I can see the temptation to do that. We have heard that the work level may not be as high over the next few years as it has been, that there may be redundancies and that profits may not be good. One subsidiary — ammunitions will be the largest division in terms of numbers, though perhaps not in terms of profits—may be more acceptable to buyers than another; for example, vehicles.
If the Government feel that they cannot sell all the divisions or float a large percentage of shares in the holding company, I can see the temptation to sell, for example, the ammunitions subsidiary separately to someone who wishes to acquire it. We would oppose that. Before the flotation takes place—I expect that there will be at least a statement—we shall use every available procedure to stress that point.
We do not want the ordnance factories sold as separate subsidiary companies or separate divisions. If a percentage of shares is to be sold, we would prefer it to be done as an entity. The Government may prefer that, but with such events as the fall in stock market prices, higher interest rates, the pound going through the floor, and other things that might occur during the coming months, the Government may be tempted to sell the profitable parts and retain or close down the loss-making parts.
We are glad that the Government have at least accepted the amendment. It does not go far, but it is better than nothing.

Mr. George: When I listened to the beginning of the Minister's speech, I thought that after a great deal of debate and pressure we were going to achieve something, but as the speech unfolded I could not understand the Government's motive in making the concession. I was sceptical.
I remember talking to a friend who works in the security business and is involved in debugging. I asked him how

many bugs he had found and he said "Four and a half." I asked him what the half was, and he said that he searched and searched because he knew that there was a bug but he could not find it.
During the Minister's speech I wondered what the Government's motives were in making the concession. As the Minister's speech evolved it was obvious that the reason why they made the concession was that they were giving nothing away. The Minister was like a magician pulling something out of a hat, giving the illusion of concession, but in fact giving no concession at all. The Minister clearly wished the message to go out that anyone wishing to participate in the sale of the century of this major Government enterprise would still be able to do so.
7.30 pm
I have several motives for hoping that the Government will consider selling the ROFs as a whole. First, I want the companies to be maintained as a separate entity because the ordnance factories are interdependent. They are part of a system, and many ordnance factories produce the overwhelming majority of their output for other ordnance factories. I understand that 95 per cent. of the output of the Featherstone agency factory and 72 per cent. of the output of Bridgwater factory goes to other ROFs. The companies are linked. One company may appear to be unprofitable, but its profitability must be considered in relation to other factories in the system.
The Minister is saying, "We accept the amendment, but it will make no difference, because when the time comes we can transfer from the holding company to the divisions." The Government are looking forward to the day when they can offer to a major investor the opportunity of buying a fine job lot. However, I wonder whether, commercial practice being what it is, any prospective purchaser will wish to buy the lot. Prospective purchasers will consider the assets, see where the bargains are, see where the valuations are low, see where the Government have granted major contracts, see where the winners are, and go for those. But the companies which may be vital to our national security may not be profitable, and buyers will avoid them like the plague. The bigger and more profitable companies will be like ripe plums on a tree, while the remainder will collapse, with the loss of many jobs.
The companies should be kept together because they are interdependent, but I fear that that will not happen. We are already hearing of prospective buyers eyeing the more profitable parts of the ROF system.
Another, purely political, reason why I wish the companies to be kept together is that it would be far simpler for a future Labour Government to reintegrate them into the public sector than it would be if the companies were sold in droplets. I cannot commit the Labour party to anything, but I hope that a future Labour Government will have a high commitment to reintegrating the companies into the public sector, where they belong.

Mr. Lee: Will the hon. Gentleman concede, in fairness, that in all the debates we have had on this issue the Government have repeatedly emphasised their intention to move towards privatisation in the form of a flotation of the whole? We have accepted that there is a thin possibility of sales of the individual divisions, but we have continually emphasised that the most likely form of privatisation is a flotation of the whole in due course, for the obvious reasons which the hon. Gentleman outlined.

Mr. George: If the Minister is correct, in two or three years' time I shall humbly apologise for misjudging him and his colleagues.

Mr. Golding: I hope that my hon. Friend will not apologise. Words such as "most likely" and "thin possibility" are not words of the sort that can be used when talking to people whose jobs and livelihoods are at risk.

Mr. George: I am not grateful for my hon. Friend's intervention because I was halfway through the point that I was trying to make to the Minister, which is that if he is proved to be right in two or three years from now, I will apologise. However—I assure my hon. Friend that I am not as gullible as he might believe — I believe that, despite the assurances, the companies will be sold off in parts because I cannot envisage a prospective purchaser buying the lot. That is a simple fact of life, and I suspect that if the Minister remains in his present position for a few years I shall not have to eat humble pie. I am pretty certain that my analysis is correct.
I am sorry to bore the House with a few more sentences on security, but it is logical from a security point of view that the companies should remain united. At present, Ministry of Defence police can be transferred easily among the companies in the ROF system because they are part of the same employing category. They are part of the ordnance factories and can be transferred in the event of manpower shortages or crises. It is an illusion to claim that the police will bail out the new security force. I have visited an ordnance factory and several private defence establishments. It would be more than possible for a clever burglar or a dedicated terrorist to get into a badly guarded factory, remove sensitive and dangerous armaments and to get away before the police panda car or the policeman with his truncheon arrives on the scene. That would be a wholly inadequate response.
The present arrangement—that Ministry of Defence police have access to armaments—is a deterrent, but from what the Minister said it would appear that they will not have access to arms under the new arrangements, except in some factories. I am delighted that Ministry of Defence police will remain in some factories — I presume that the factory at Enfield will be one—but I must repeat to the Minister that all ordnance factories manufacture equipment which could be of great advantage to a prospective terrorist. A robbery at one factory might be inadequate, but simultaneous robberies at several factories would enable terrorists to match sets of equipment and to produce instruments of destruction. With the present unity of ordnance factories there is likely to be security reinforcement among them all.
I fear that the companies will be sold and that the Ministry of Defence will have no power over them. A private company that buys an ordnance factory will say, "We shall operate the security arrangements which we believe to be appropriate." If the Minister believes that may private defence factories have adequate security arrangements, I shall tell him privately that, based on my experience that analysis is exceedingly naive.
I have used security as one reason why the ordnance factories must be kept together. I suppose that historians or political scientists studying our proceedings over the last 10 months may say that the Government having made a concession shows the power of the Back Bencher. If political scientists read the Minister's speech with double

care, they will find that the concession is marginal. It may be a credit to the Opposition, but it is clear from what the Minister said that he is reassuring people outside the House that if they wish to buy the lot, the acceptance of the amendment will not alter one jot, the Government's intention to sell the lot. The amendment is hardly a victory, but we are grateful for the Minister's honesty when he said that the concession was of minimal importance.

Question put and agreed to.

Lords amendments Nos. 3 and 4 agreed to.

Clause 17

SHORT TITLE, ETC.

Lords amendment: No. 5, in page 13, line 19 leave out subsection (2).

Mr. Butler: I beg to move, That this House doth agree with the Lords in the said amendment.
Let me explain why the Government introduced the amendment in the Lords. The provision which the amendment removes was originally inserted in line with the convention that is nowadays generally practised. At that time it was supposed that Royal Assent would be obtained to allow vesting day on 1 October. That date has now slipped, and it is important that any obstacles which might cause further delay should be removed if that can properly be done.
Bringing the Act into force immediately—which, of course, the amendment allows — would permit the Secretary of State to make a scheme as soon as possible after Royal Assent so that vesting day for the new Royal Ordnance Factory Company would not be automatically delayed by two months.
We have made it clear that we wish to proceed quickly to the incorporation of the new company. That will help the successful launching of the company and help to avoid uncertainty for the work force and for the Department's future dealings with the company.
We must interest ourselves in whether what is proposed is proper for the Government to undertake. The Opposition in the other place seemed to think it was, because they did not oppose the amendment. Why then was what I referred to as the convention of the two months delay introduced? It was to permit time for those who are likely to be affected to be able to acquaint themselves with the new law. Generally, it is the public who are affected by legislation. In this case the public are not directly affected by the Bill. The work force is affected by the Bill, and it is fully aware of what is involved in vesting. Nevertheless, we shall take certain precautionary and helpful action.
We shall do what is possible to minimise the delay between Royal Assent and the general availability of the printed Act. We shall also be placing advertisements in the press to publicise the passing of the Act and the making of the initial scheme. We shall notify directly those third parties—for instance, the owners of land and others—who have been identified as being affected by the transfer. It is fair to say that no one who may be affected in some specific way by the Act will be unaware by vesting day that he has been affected, and he will know in what way. The legislation provides for recourse to arbitration and possible compensation if a third party is adversely affected by the Act.
The provision deleted by the amendment was included principally for reasons of convention. I have explained why it is necessary to delete it. We are taking positive action to publicise the Act and special steps to ensure that affected persons are aware of the new legislation. For those reasons, I hope that the House will support the amendment.

Mr. Denzil Davies: The Opposition cannot agree with the amendment, and I shall explain why in a moment. The reason for the amendment is that the Government ran into timetable difficulties with their business and could not obtain Royal Assent on 1 August. Their intention was to obtain Royal Assent on 1 August and vesting day was to be 1 October. As the timetable in the House of Lords went haywire and the Government had their business wrong, we are still debating the Bill.
Even if the Government carry the amendment, it will still take a few days or weeks before the Bill becomes law. If the amendment is accepted, vesting day will take place immediately the Bill becomes law. If the amendment is not accepted, the original provision will apply and vesting day will be two months later.
The Opposition oppose the amendment because we believe that time is needed—I make this point seriously, not for delaying purposes—between the Bill becoming law and vesting day to clear up certain matters about which the trade unions and employees are worried.

Mr. Butler: To become law, the Bill would have to gain Royal Assent before Parliament is prorogued. That does not of itself precipitate vesting day. The Secretary of State then has to make his scheme, and, as we have recognised, there are a number of points which must be considered further and finalised before a scheme can be made. The amendment removes a provision which would otherwise have made it impossible for vesting day to take place before two months had elapsed.

Mr. Davies: If the amendment is carried, vesting day and the passing of the Bill could be almost simultaneous. I am not saying that they will be simultaneous. If the amendment is rejected, the original two months period remains. Whatever the technicalities, time is still needed. I believe the Minister accepted that to some extent in his intervention. By voting against the amendment we are making the point that time is still needed to consider various matters, some of which have arisen as a result of statements made in another place on Monday.
There are certain matters which should be cleared up before vesting day. The first one is perhaps not as important as the second. It concerns what has come to be known as the MOU—the memorandum of understanding. We were told that we should see it before the Bill became law. We have not yet got it. We understand that it governs the relationship between the new plc and the Secretary of State and that it sets out various matters about management and so on. It is extraordinary that we have not yet had sight of it when we are in the last throes of our proceedings on the Bill. I seem to remember that we were promised it. It may be that the Under-Secretary of State, being a cautious fellow, did not go as far as to give an

absolute guarantee, but he suggested that he would do all that he could. I am sure that he has, but we still have not got the memorandum of understanding.
One aspect of it gives the Opposition particular concern. We understand that there may be some kind of investment limit put upon the new company and that it is set out in the memorandum of understanding. I do not know what that is. It may be £8 million; it may be less. However, we should be told. The Treasury is very interested in these matters, because the new company is still totally within the public sector borrowing requirement and Government accounting. I have no doubt that the Treasury wants some kind of investment limit. If it is £7·5 million, that seems very low in respect of a company which has probably invested more than that in the past and ploughed back a great deal of its profits.
It may be that I do not know what I am talking about, but I hope that the Under-Secretary of State will say whether there is an investment limit and, if there is, what it is, what is its purpose and whether it will inhibit the development of the business once it becomes a public limited company.
I turn to a more important topic which affects the employees immediately. I refer to our friend TUPE '81. The Minister of State is lucky in that he did not have to go through our long sittings in Committee when we were obliged to discuss this ridiculous TUPE '81, which relates to transfers of undertakings. It is a concept dreamt up for us by the Common Market.
Although we did not accept it, we were told that TUPE '81 was to apply and that it meant that it was not necessary to set out in the Bill specific clauses transferring specific rights that the employees have at present. There is a long list of rights, including pensions, redundancies, trade union recognition, negotiating rights and many others that the employees enjoy at present. Apparently, all of these could be transferred under a blanket provision merely by incorporating or referring to TUPE '81 in the Bill.
The Opposition always had misgivings about it. The Minister told us that there was nothing to worry about. But a problem has arisen partly in relation to a specific case of redundancy, and there is a general point as well.
I deal with the general point first. Ministers have always said that TUPE '81 applied. In a letter written by the Secretary of State to all the employees on 30 January 1984, he made the point clearly. On page 4, he said:
For you—the individuals on whom the ultimate success of the new organisation will depend — the change from Civil Service status is a major concern. Many of you have made this clear to Ministers visiting the factories, and to your elected representatives in the House of Commons. Today your terms and conditions of employment—your pay, hours of work, leave entitlement, your pension rights and redundancy benefits, your trade union recognition and negotiating rights—are set out in the enormous collection of rules and regulations covering the Civil Service as a whole. Under this Bill, these will, with the exceptions mentioned below—
they are concerned mainly with pensions and indexation—
be transferred on vesting day to the new organisation. There will, therefore, be no change for you simply as a result of the transfer.
He was saying, in other words, that their rights, apart from indexation and one or two other matters, would be transferred en bloc by TUPE '81 and that it was not necessary to write it all into the Bill, whereas the Opposition tabled amendments saying that we preferred to see it all in the legislation.
When discussing these matters recently with Mr. Reid, the personnel director of the new company, the trade unions gained the impression that he did not regard TUPE '81 with as much reverence as Ministers seemed to regard it in Committee. Mr. Reid imported some kind of concept, that the needs of the new company might be different from those of the Civil Service. I do not know the origin of the word "needs", but that is the way that the company is trying to slide out of its commitment. The suggestion was that the needs were different and therefore that it did not follow that TUPE '81 lifted all the rights of the employees and put them into the new company. He more or less said that that would have to be looked at. When it was pointed out to him that Ministers had given assurances, apparently he replied, "It is a matter for the courts, is it not?"
One can imagine the effect on the employees and the trade unions, with all the upheaval of change and all the problems of indexation, redundancy and their opposition to the scheme, to be told that even the TUPE '81 mechanism, which everyone thought would protect and preserve their rights, might not apply to the new company and that at the end of the day they might have to go to the courts to determine their rights, despite the assurances by Ministers.
On 21 October, in the other place, when dealing with both the specific point of redundancy and the general point, Lord Trefgarne said:
I believe, therefore, that I can confirm everything that I said on Report; but, of course, I have to point out that in the end the question of whether TUPE 81 does or does not apply is a matter for the courts. But the Government's view is contained in the words that I have already uttered, which I hope will be of assistance to the noble Lord. That, I think, disposes of the question". — [Official Report, House of Lords, 22 October 1984; Vol. 456, c. 43.]
The noble Lord was saying that it might be the Government's view that TUPE '81 applied but that it was the courts that decided these matters.
We were not told that in Committee. We debated TUPE '81 again and again. Even the parliamentary draftsman was called into the Box, and I could see him nodding as the Minister expounded the impregnability of TUPE '81. Now we are told, "We think that it is all right, but you will have to go before a High Court judge if you want to determine your rights."
Once the employees have been shifted into the new company, even though the Secretary of State owns all the shares, presumably it is the management which will decide whether to apply TUPE '81 to all these rights. In Mr. Reid's mind, if the company does not think that it applies, employees will have to go to the courts for a ruling.
This is a matter of considerable concern to the Opposition and to the employees alike. We were told time and again that there was no problem about these rights and that they were protected by TUPE '81. Now we are told that they may be protected but that the courts decide these matters. That does not give a great deal of reassurance to people whose livelihood may be at stake.
I come to the specific matter which has given rise to the general problem of TUPE '81. The problem relates to mobility rights and redundancy arrangements. If redundancies are imminent within the Civil Service—this applies to non-industrial civil servants and there are rules for industrial civil servants—there is almost a right or guarantee to be transferred elsewhere within the Civil Service. If TUPE '81 applies, it seems that those rights apply and that they will be lifted from the Civil Service

arrangements into the new company, although the existing rights enable a civil servant to move anywhere within the Civil Service, not merely within the ordnance factories. However, even if TUPE '81 applies, the right of transfer will be no more than company-wide. It will be a right to work for the holding company or for the four subsidiaries.
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Those who will become the managers of the new company are suggesting that if redundancies occur, the mobility right will not be company-wide. It is being suggested that there will not be a right to move between subsidiaries. It is suggested that the right will be restricted to a move from the part of the factory where the employee has been declared redundant to another part of the same factory. If there is work in another part of the factory, the employee will be able to be moved there if there is room for him. However, he will not have the right to be moved to another factory in another part of the country. It will not be possible for him to be moved from the munitions subsidiary, for example, to the vehicles subsidiary.
This lack of mobility is causing great concern, especially when 1,500 or 1,600 redundancies are imminent. I accept that there cannot be a mobility right into other parts of the Civil Service, for that has been removed from ROF workers, but they should surely have the right of mobility throughout the entire group comprising the holding company and the four subsidiaries. If that is not accepted, there will be considerable concern and irritation among the work force. I hope that the Under-Secretary of State will make it clear beyond doubt that their mobility is not restricted to the factory in which they work, but that they will have the right to be transferred either to the holding company or the subsidiaries.
The pension arrangements are still not satisfactory. The Government have still not provided what they said they would provide when we discussed pensions in Committee. The issue is that the employee should suffer no detriment. He still will not enjoy the indexation that he would have received in the Civil Service. There has been some movement, but there is room for more. The trade unions realise that if there were an economic crisis of a proportion to cause the Civil Service index-linking system to collapse—that could happen if inflation were to reach extremely high levels — they could not expect to have index linking in public companies. The unions are asking for index linking as long as there is index linking within the Civil Service. They are entitled to ask for that, and that is something the Government owe them. Pressure and debate have caused the Government to move to a certain extent, but not as far as the unions have asked. Perhaps the Treasury is the problem. Surely the unions are making a reasonable request.
No detriment, to use the Secretary of State's term, means that there should be index linking as long as the Civil Service has it. Vesting day must not be the day on which the Bill becomes law, because the index-linking issue must be resolved before the ROFs are shunted out of the Civil Service into a public limited company.
The ordnance factories have benefited over the years by being part of the Government and from the preferred source arrangement. The trade unions and most employees do not want the ROFs to be privatised. Indeed, they are almost entirely opposed to privatisation. However, they understand that the Government's competition policy means that they are unlikely to enjoy a continuation of the


preferred source policy. That is a shame, but that must follow from the Government's policies. Nevertheless, the trade unions and management are asking for time to adjust. They do not wish to be thrown from a position in which they have a guaranteed income by selling their wares to the Ministry of Defence into a world in which they have to compete in a different environment following a great upheaval.
I know that Conservative Members will say, "If the ROFs cannot compete, they cannot be that good," but it would be unfair to take that view. In the past, a standard of quality has been imposed upon the ROFs. Once they become a public company, they could be undercut in the short term by European competitors because quality costs money. A lower quality product can be made cheaper.
The trade unions and the management are asking for time to adjust. It is not for me to say how long they should be given, but they are asking for a period in which to adjust before they enter a competitive world. In effect, they are saying, "We are efficient and we produce high quality goods, but there is a problem because of our relationship in the past with the Ministry of Defence." I hope that their request for time can be dealt with and met before vesting day.
There is a memorandum of understanding, TUPE '81 generally and especially in terms of redundancies, index linking and preferred source. I hope that there will be a statement from the Under-Secretary that will go at least some way to reassuring employees and management in the ordnance factories on many of the issues that I have raised. The Government owe that to them. They have a duty to resolve these matters before the conveyancing mechanism takes effect and the ROFs are shunted off into a public limited company.

Mrs. Anna McCurley: I add my good wishes to those which have already been offered to the Minister by my colleagues. I hope that he is always as completely reasonable as he was in his response to the hon. Member for Blackburn (Mr. Straw). It would be invidious to take advantage of my hon. Friend's courtesy and yours, Mr. Deputy Speaker, while speaking to the amendment, which in part I oppose.
The House will appreciate that ROF Bishopton is in my constituency. Any mention of redundancy has to be taken extremely seriously, especially when rumour has it that the losses will amount to 1,600 jobs, with 400 or more redundancies occurring at ROF Bishopton.
ROF Bishopton is something of an institution in Renfrewshire. It is a major employer of labour in my constituency. The Bill has led to considerable debate and anxiety among the work force. The Minister has denied that the Bill and any subsequent preparations —unspecified — to transfer to the private sector have anything to do with the current plans to cut jobs, and it is ironic that the issue which troubled the work force most and took up most of the discussion time was something of a red herring. At least I am temporarily reassured that it was a red herring.
A massive haemorrhage of jobs would damage morale even more within the factory. It would cause considerable despondency in an area which in the past year has suffered the trauma of the Scott Lithgow crisis. It has started to pick itself up again and job vacancies are increasing. Things

were looking much better. Government policy was working. Government policies are working in my constituency and travel-to-work area. It is true that this news is a considerable setback to us. ROF Bishopton prepares the gun propellant FH70. Although I fully understand the Government's anxieties and efforts, the trilateral agreements must be upheld. The combination of poor order books, stockpiling and international arrangements provide gloomy news for Bishopton. ROFs have a good, hard-working work force. We must remember whenever their efficiency is talked about that they twice won the Queen's award for industry.
I am puzzled about the reason why there has not been a little more foresight. Surely the Ministry of Defence alerts the ROFs. Surely it could have planned for this time. Why were no steps taken earlier to prevent sudden large losses of jobs? We cannot play ducks and drakes with jobs. We might need that portion of the work force again. Why has there not been a gradual reduction in the work force on the basis of a programme of voluntary redundancies? I understand that in the near future the SP70 programme will commence. Is it not possible to bring it forward now and save us all trouble?
I was grateful to my hon. Friend the Member for South Ribble (Mr. Atkins) for bringing to the attention of the House the question whether the Bill would preserve the ordnance factories, but I was more pleased to hear his plea to the Minister to aim to disconnect in the minds of people the false link between redundancies and the Bill. I was particularly pleased to hear that he was able to elicit assurances on terms of redundancies.

Dr. Norman A. Godman: The hon. Lady knows that some of my constituents work in the ROF at Bishopton. Does she agree with me that many of our constituents were deeply worried not only about the implications of the transfer of the production of the FH70 propellant material to the Federal Republic of Germany, but about what they saw as their geographical isolation relative to other ROFs in the organisation? Does not that relative isolation worry those people when considering future decision-making on the disposal of the ROFs? Their immediate fear is about the implications of the FH70 transfer and what they see as their geographical isolation.

Mrs. McCurley: I cannot answer for the Government's position, but I agree that there is anxiety. I believe from past experience that, generally speaking, the anxieties in Bishopton have been misplaced. For the past few years, ROF Bishopton has been working to full capacity.
The last time that I spoke in a debate on the ROFs I said that I would vote for the Government on this issue—more as an act of faith than out of genuine conviction that the Bill was satisfactory or enlightening. To say the least, my faith is a bit shaky, but I shall remain with my stance. I reiterate, however, what I said previously. If the consequences of enacting this Bill ever show signs of aggravating our current position, I and my colleagues would be swift to react.

Mr. Carter-Jones: I understand the feeling of the hon. Member for Renfrew West and Inverclyde (Mrs. McCurley) that the Government Front Bench owe the workers in the ROFs a fair amount. For 20 years, I have


been visiting the royal ordnance factory at Patricroft, which has given sterling service. I have visited that factory with the Under-Secretary of State for Defence Procurement. When we went there, the Minister was pressed about pension rights but we still do not know the answer to that question. The Minister gave a parliamentary answer dated last Monday, about pensions in ROFs, but the issue has still not been settled.
I am begging for some delay because the honourable thing for the Government to do is not to use weasel words and praise the unions, staff associations and management and then leave the issue with a great big question mark hanging over it. The Government owe a debt of honour to those people. The Government cannot praise them and then ignore them. The people have a right to know. The time factor is significant. The trade unions have been houourable in their actions with the Government.
Last week I visited the ROF at Patricroft and noted that the workers were still worried. Two worries remain following two parliamentary replies which were given only last Monday. The Government say — the hon. Member for Renfrew West and Inverclyde would sympathise with them—that the forecast workloads are giving rise to serious worry at the royal omance factory. Those are the Minister's words, not mine. If the Minister is worried about this matter, he has a serious obligation to resolve those anxieties before he makes his final decision. There is no question of blacklegs or anyone else in the ROFs not agreeing. The union members are of one mind. They believe that their leaders represent them. They feel that they have been let down by the Government. The Government have a clear obligation, even though the legislation is now becoming law, to reconsider the matter with speed, integrity and houour and to resolve the problems of redundancy before vesting day.
The Government have a firm obligation with regard to pensions. Since the White Paper was delivered, I have pleaded with the Government to give a lead on pensions. There is a chance, before the legislation receives Royal Assent, to hold firm, positive discussions. If the Government do not come to firm decisions on pensions and redundancies, their words of praise to the work force will have no meaning. Those words will have been polite utterances by Ministers trying to get legislation passed. Let us make those words a reality. The Government should go back to the unions and negotiate firmly. They should negotiate so that the unions have the agreement that they were promised.
In my 20 years in the House I have never known Government Front-Bench spokesmen look so miserable about a Bill. It would have been better if, at the outset, the Strathcona amendment had been accepted and all this silly drivel had been driven away. Having taken this action, the Government should turn their words of praise into something realistic and not make the measure into a sham. I say to the Government, "Before vesting day, go back to your work force, the associations, management and unions and, once and for all, resolve the pension and redundancy problems."

Mr. John McWilliam: I am pleased to follow the hon. Member for Renfrew West and Inverclyde (Mrs. McCurley) in this debate, because she raised an important point. If there are redundancies at ROF Bishopton, which makes the propellant and explosive, there will unquestionably be redundancies at ROF Birtley,

which makes the shells. We are caught with this Bill. I disagree with the hon. Member for South Ribble (Mr. Aitkins) who tried to destroy the credibility of the link between the privatisation of the royal ordnance factories and the redundancies that will occur. I do not believe that he destroyed that credibility.
I believe that there is a direct link—a desire by the Government to quote down the value to make privatisation easier and to hold back orders which will make profitability greater immediately after privatisation. I would welcome a reassurance from the Minister that that is not the case. I believe him to be an honourable man, and I do not believe that he would willingly go along with such a ploy. On the other hand, I do not believe that he is necessarily fully aware of the Government's desires.
The Minister is both the provider and the customer. Ammunition orders this year are 25 per cent. down, and as the customer he can do something about that. United States Department of Defence Appropriations hearings for 1985 state:
fire only so many rounds pet hour … This conservation measure is to be employed against an enemy whose tactics rely on mass formation and continuous attacking waves of troops. One artillery commander commenting on his presently authorised basic ammunition load (3 days) said that he fired that amount in less than one day in Vietnam.
Instead of lack of demand for ammunition, we have the United States admitting that it is short of ammunition. Yet we are faced with 470 redundancies in the constituency of the hon. Member for Renfrew, West and Inverclyde and with about 600 in mine, where, thanks to the adherence of the Americans to the Chancellor's strategy, we have just lost 1,200 jobs at Catterpillar, because once again the Americans have exported their unemployment to us.
There is the three-country deal on FH70 ammunition. I telephoned the private office of the Minister's predecessor before the recess because I was given to understand that there was a problem. I was reassured when his office told me "Yes, the Germans are entitled to their share of the FH70, but the SP70 ammunition is coming in." Where is it? Neither I nor the workforce can see it. I have received a note from the works convenor at Birtley which says that at present 497 jobs are at risk because of the lack of orders and this three-country deal. What is more, when one looks at the size of the order for FH70, it seems that the Germans are demanding not just their share for this year but for last year, which they could not make or complete, and for the year before, which they could not make at all. If the Minister is giving in to this kind of pressure, I hope that he will have the honesty to tell us that that is what he is doing. I do not believe that that is in the national interest.
There is also the suggestion that although the Germans want a bigger share, the price they are quoting is higher than the price charged by Birtley. If so, why are the Government wasting public money in this way?
The hon. Member for Renfrew, West and Inverclyde may not be aware of it, but I understand that West Renfrew has been told that if it can quote the lowest figure for propellant it will get the order. However, Birtley has not been told that if it quotes the lowest figure for shells it will get that order.

Dr. Godman: My information is that ROF Bishopton supplied a tender and a delivery date and that the German company was asked whether it could match both or undersell ROF Bishopton. It was explained that the ROF


tender was cheaper and that delivery dates were spot on, but that the Germans were asked to match or improve on the two.

Mr. McWilliam: I am grateful to my hon. Friend. That shows that we are debating the Bill in ignorance. We spent a hard Committee stage in ignorance. Ministers have not been prepared to tell us what the situation is. My hon. Friend and the hon. Member for Renfrew, West and Inverclyde may well be right, but we need to know.
Why was the problem of redundancies not raised last week? Why was the other place left in absolute ignorance? Why did the only admission of possible redundancies come in a reply to my hon. Friend the Member for Eccles (Mr. Carter-Jones) on Monday? What are the Government trying to do?
Obviously I am opposed to the privatisation of the ROFs on political principle. I make no apology for that. Equally, I accept that on the basis of political principle Conservative Members are in favour of privatising the ROFs. We are talking not about political principle, but about people in my constituency who will never work again. The Minister must be honest with the House. He should tell us what the damage will be. There is no point in hiding behind a possible order to alleviate some of the redundancies. The Minister must tell us what possible orders exist. Why are all these super salesmen whom we employ not camping at the doors of the Pentagon trying to make good the shortage of shells to which the American artillery commander referred?

Dr. Godman: I wish to reiterate what I have already said. My information is that the lowest tender for the FH70 propellant material came from the ROFs and that consequently the Germans were asked whether they could match them in terms of price and delivery date. Not unnaturally they said yes.
The people whom I represent who are employed at ROF Bishopton are understandably deeply concerned about the implications of the collaborative agreement on the transfer of the production of FH70. If the ROFs have lost this important work, will the Minister encourage an acceleration in the switch to other products in the hope of ameliorating some of the attendant problems? It should be remembered that the fears of redundancy have been aroused in an area which is still characterised by dismally high levels of unemployment. Ministers appear most eager to plunge the ROFs headlong into competitive markets.
Contracts which the MOD has historically placed with the ROFs will presumably be put out to competitive tender. If so, is there not a danger that that will result in orders being lost to foreign competition which may produce cheaper but somewhat inferior materials?
I have been led to believe that a number of ROF products are costly compared with those produced in Europe and elsewhere, but we should not lose sight of the fact that traditionally, and to my mind sensibly, the United Kingdom armed forces have set exceedingly high quality control standards. That makes eminent sense.
A is right that the standards demanded by customers should be exceedingly high. But if that is so, it will inevitably be reflected in the product's cost. The price of a material or service should not become the simple

yardstick by which tenders are assessed and accepted. I am concerned that that simplistic approach is finding favour with the Ministry of Defence.

Mr. Piers Merchant: I have a constituency interest in this issue, as several of my constituents work at the ROF at Birtley, to which the hon. Member for Blaydon (Mr. McWilliam) referred. If it was just a question of competitiveness, there would not be so much concern. However, is the hon. Gentleman aware that the suggestion about the FH70 order is that several future orders will be placed with German factories —particularly for shell case parts—not solely because of competitiveness but because a form of protectionism was built into the 1970 agreement? Consequently, foreign manufacturers have an advantage over the highly competitive British ROF manufacturers. That is distorting the market place and it is certainly not helping British industry.

Dr. Godman: I need hardly reply, as the hon. Gentleman has put the case most succinctly and eloquently. He is right. That protectionism is harming those whom we seek to represent.
If price becomes the major criterion, the armed forces may have to accept inferior military products from some of those foreign producers, sections of our defence industries will be lost to continental competition, with the consequence that our capability to maintain the production of military materials under national control will be put in jeopardy—a major threat—and the loss of orders will lead directly to massive redundancies.

Mr. Ashdown: Is the hon. Gentleman aware that it is not just friendly nations which may pick up some of the orders and upon which we may become dependent, but also nations that might be considered to be on the other side of the fence? For example, the ROF in Bridgwater has had to rely in the not-too-distant past on the supply of Bulgarian TNT. Does not that make the hon. Gentleman's point even more powerfully?

Dr. Godman: I am deeply grateful to the hon. Gentleman for that intervention. Although we have not discussed these very important issues, I am sure that there is wide agreement about what we both define as friendly and unfriendly nations. However, I am not offering any sort of political hostage to the hon. Gentleman and his party.
Of course the hon. Gentleman is right in that national control is being dissipated in the way that I have briefly outlined.
People are worried about redundancies and pension rights. Today we have had some assurances, but those fears and uncertainties cannot be dispelled even by the managements of the ROFs, as they seem to be equally unsure about the short and medium-term prospects. The Government have a responsibility to allay those fears and to respond to the deep concern of the people who, as the Minister has just said, are directly and deeply affected by the Bill. Those involved are decent, ordinary, honourable people and the ambiguity surrounding their livelihoods and workplaces should be cleared up as soon as possible. They deserve nothing less from the Government. Time is needed to enable the ROFs to adapt to the radically different circumstances that are brought about by the Bill.

Mr. Straw: rose —

Hon. Members: Hear, hear.

Mr. Straw: An expected pleasure, and I welcome the approbation of my colleagues.
I share the concern of my hon. Friends the Members for Blaydon (Mr. McWilliam) and for Greenock and Port Glasgow (Dr. Godman) and of my right hon. Friend the Member for Llanelli (Mr. Davies) that there should be a delay of two months before the Bill comes into force, not least in order to provide time, while the ROFs remain fully under the control of the Ministry of Defence, for the Ministry to explain exactly what redundancy notices will be issued and what the future job prospects are for the hundreds of employees whose jobs have been placed at risk by recent announcements and rumours. I hope that the Under-Secretary of State will be far more forthcoming in his answers than the Minister of State was when he replied to my intervention earlier.
The Under-Secretary of State may say that it is a mere coincidence that it is rumoured that upwards of 2,000 redundancies are about to be declared in the ordnance factories at a time when the Bill is about to be passed and privatisation is about to become a reality. However, it seems to us to be more than that. I say that, first, for the reason given by my hon. Friend the Member for Blaydon, which is that the Government have a vested interest in ensuring that the companies' future prospects are better than they are at present. Therefore, they have a paradoxical vested interest in delaying orders to those companies so that the companies' future earnings can be puffed up when they come to be sold. We know that the Government have always placed a quick return above the need for introducing greater competitiveness into the market place or the long-term future of those companies.
My second reason for saying that it is no coincidence is that I believe that the whole privatisation exercise has meant that the resources and time of Ministers and senior officials at the Ministry of Defence have been concentrated on this doctrinaire, ideological and wholly unnecessary saga of privatisation instead of on finding and processing orders for the ordnance factories and securing their longterm futures.

Mr. Geoffrey Dickens: Is the hon. Gentleman aware that what he said borders on the dishonest? In my former constituency of Huddersfield, West tremendous orders for tanks were cancelled when the Shah of Iran was replaced, and the British Government chased all over the world to find someone to accept them. That does not sound to me like an uncaring Ministry of Defence. Indeed, I was deeply grateful for the work that the Ministry did in keeping jobs going in the ordnance factories in Leeds, and in helping the component manufacturers in Huddersfield, West. I take great exception to the tone of the hon. Gentleman's speech.

Mr. Straw: I regard that as a compliment. I shall send the hon. Gentleman a note when I next plan to speak in the hope that he will turn up to take exception to what I say. The hon. Gentleman has reassured me about any worries that I may have had about my future in Blackburn.
Ministers have dined out on the Shah of Iran alibi for many years in their efforts to explain away job losses in the ordnance factories. That has not done before, and it will not do now.
Morale has been damaged for two reasons. First, between 1974 and 1979, when a Labour Government were in power—and before—ordnance factory employees had secure jobs. They saw the number of jobs increasing, not falling. Jobs in the factories increased from 18,519 in 1974 to 23,119 in 1979. The Labour Government knew how to manage the ordnance factories. That was proved by the increase in the number of jobs. That increase in jobs was reflected in Blackburn where jobs at the ordnance factory increased from 2,213 in 1974 to 2,532 in 1979.
What has happened since then? Year after year, job losses have taken place in the ordnance factories. As the financial memorandum of the Bill makes clear, numbers have dropped from their peak of 23,119 in the last year of the Labour Government to 18,600 — a reduction of 4,600, or 20 per cent.
The second reason why morale has been damaged is that, alongside unprecedented cuts in jobs, there has been enormous uncertainty about the future of the people who have given dedicated service in all the ordnance factories. It is almost four years since we had the first debate, on 18 December 1980, about the future of the ordnance factories. When the right hon. Member for Cambridgeshire, South-East (Mr. Pym) was in office he recognised what an insane and senseless policy privatisation was and he dragged his feet. We commend him for that. He was unceremoniously removed from office, more Thatcherite Ministers were introduced and more privatisation measures were introduced. The policy now has neither manpower nor defence strength about it. It is inspired by ideology, by doctrinaire Thatcherite ideas and by an obsession with reducing Civil Service manpower by playing the numbers game. People are not to be stopped doing jobs, but they are to be removed from the books. Despite the knocks to staff morale, workers have given dedicated service in all the ordnance factories, not least in those in Blackburn and Chorley.
It is unlikely that we shall be able to stop privatisation. I am glad to see in the Chamber my hon. Friend the Member for Burnley (Mr. Pike) who, on behalf of trade unions representing the two Lancashire ordnance factories, has put up a major and significant fight. As a result of that fight, at least some aspects of the privatisation measure have been ameliorated. We have made some progress.
All that progress will be lost if, as the Bill goes through, workers receive redundancy notices. It is a tragic commentary on this Government's priorities that the prospect of between 1,500 and 2,000 redundancies looms large at factories such as Blackburn and Chorley, Birtley and Bishopton. I hope that we shall receive the detailed reassurance which was so sadly lacking when the Minister spoke earlier.

Mr. Merchant: I remain firm in my support for the staged privatisation of the royal ordnance factories because it is beneficial to the consumer, the factories, the industry as a whole and the work force. I am anxious about the industry's future which will remain dependent on home orders and therefore on procurement policy. I am worried about the future of ROF Birtley which draws on a work force living in my constituency I was approached by trade union representatives from Birtley some months ago to discuss not only Government policy on the ROFs but


procurement policy and in particular the future of FH70 155 mm shell parts, the casings for which are manufactured at Birtley.
I hope that the Minister will give us some assurance about the future of that vital order. The hon. Member for Blaydon (Mr. McWilliam) is a convert in terms of recognising the danger. He is a late convert because as recently as 1 August he accused me of unsubstantiated meddling when I said that job losses at Birtley might take place because of doubts over the placing of the FH70 shell casings.

Mr. McWilliam: I accused the hon. Member for Newcastle upon Tyne, Central (Mr. Merchant) of unsubstantiated meddling because I took the trouble to check his story with the Minister's private office and was assured that there was no problem. The hon. Gentleman's remarks sounded then like unsubstantiated meddling, and they still do.

Mr. Merchant: If the hon. Member for Blaydon still accuses me of unsubstantiated meddling how is he able to use the same logic and arguments that I am using in relation to the future of FH70 orders? His speech centred on doubts about the future of that order and the jobs connected with it. If the hon. Gentleman had checked more fully in August, or even if he had contacted me, I might have been able to assist him in verifying the substance of the suggestions that I made at that time.
Birtley and other ROFs have produced high quality products on time and competitively. Orders for shell casings are being given to German industry under German pressure. The signs are that future orders for shell casing parts and other parts of the FH70 package will also go to Germany.
The German industry has had to construct a new production line to manufacture the shell casings when factories in Britain already have a well-tried and tested production line. I understand that the Germans are struggling to meet order deadlines and to produce the products at a sufficiently high quality. ROF Birtley can already produce a high quality product at competitive prices, on time.
There is no question of ROF Birtley not being able to compete competitively. It is not being allowed to compete freely and it is suffering from German protectionism supported by the British Government. I do not understand why Ministers are unable more effectively to resist German demands, even within the 1970 trilateral agreement between Britain, Germany and Italy. If they are not able to resist that pressure and if it is not possible to place large orders with the acceptably good British equivelant to the German producers, surely it would be possible to renegotiate the 1970 agreement to give more recognition to the British producers.
It is difficult to inspire support for the Bill outside of those who already support it—I refer in particular to the work force of the ROFs—if, at the same time, doubt is cast over the future of the industry through what I can only describe as morale-harming procurement policy. Therefore, I ask Ministers, when they look at the future of the ROFs as units, to bear in mind the crucial impact on the future that procurement policy has, and therefore

be prepared to give a greater credence to the undoubted success of the past and the undoubted future that the British Royal Ordnance industry has.

Mr. McNamara: This has been a short but important and interesting debate. This amendment, which the Government pushed through in the other place, is a confession of their failure. It is a confession that they cannot handle party timetables and that the Department could not carry out its work load properly, so it is necessary for the Government to come back to the House in late October after the Commitee had been told that vesting day was 1 October. What is more, the Government still cannot give us the information that we asked for when we first debated the matter in the House.
The Minister said that the Government would not be allowing the two months' time lapse before the Bill came into force, although that would give people affected by it time to make representations or continue discussions. As my right hon. Friend the Member for Llanelli (Mr. Davies) pointed out, there are many discussions ahead, for example with the work force, and much information is still needed. Instead, the Minister is going to put his notices in the newspapers, write to people and so on. If he is going to tell everybody what happens in the scheme through that method, will he give an undertaking that the Secretary of State or the Minister will make a precise statement to the House on the day of the publication of the scheme? We are the elected representatives of the people in general and in particular of the people who work in the ROFs.

Mr. Butler: The hon. Gentleman knows perfectly well that I shall not do that. However, as I have already said, we shall not keep to the letter of the law which, if finally the Bill receives the Royal Assent, would require the scheme to be laid before the House within one month of vesting. We have agreed that a copy of the scheme will be put into the Library before vesting day, so the details will be known in advance.
Futhermore, the two month rule is not to allow further negotiations and discussions but purely to allow those likely to be affected by legislation to see, if they so wish, the legislation printed. They can become acquainted with the law before it takes place. I have explained why, in this case, we have felt that that was not necessary.

Mr. McNamara: I am pleased that the scheme will be in the Library before vesting day. However, on vesting day, can we have a statement in the House, when we shall have had the opportunity to read the scheme and will be able to ask questions about it? Hon. Members whose constituents are involved and those who are concerned about national security should be able to ask questions. That is the least that the Government can do after the mess that they have made so far.
My right hon. Friend the Member for Llanelli mentioned the memorandum of understanding. We understand that there are rumours that there will be limits on the amount of capital that can be invested by the holding company before it is privatised, and that it will be limited to not more than £8 million in the course of one year. Can the Under-Secretary confirm that? Where does that put Royal Ordnance plc in relation to its competitors, who will not have that same limit on investment?
I also understand that limitations will be placed on the ability of Royal Ordnance plc to diversify in the hiatus while it is waiting to be privatised. Is that true? If so, that


would mean that it will not be able to compete freely and fully on the open market, despite the great anticipations of the hon. Member for Chertsey and Walton (Mr. Pattie), but will be limited on investment and diversification.
My right hon. Friend the Member for Llanelli also referred to TUPE '81 and he showed clearly how the strength and fervour of the Ministers' original statements that the employees had nothing to fear from being transferred because TUPE '81 would protect them in every way mean nothing. We had the final weasel words of the Minister in the other place last week, who said that this would have to be decided in the courts and that he could not guarantee what the Government have been saying that they will give. If we are to believe what we are told, the new management of these factories has been dragging its heels on agreements, waiting for vesting day. They know that after that day, the power of TUPE '81 goes out of the window. Then, the agreements and other arrangements will only operate if they are suitable for the particular factory.
If employees in the ROFs are made redundant before vesting day, will those who still have rights as mobile civil servants retain those rights until vesting day, so that they can seek employment elsewhere in the Civil Service? That is one of the most important aspects of the matter.
My hon. Friend the Member for Eccles (Mr. Carter-Jones) and others have pressed strongly for information on what is to happen about pensions. I understand that the Minister may have been advised that there has been an acceptance of the fact that there will be a notional detriment. Is that true? If so, has that detriment been quantified? What does it mean in money terms?
The issue of redundancies has been a sad and sorry story. It was interesting to hear what the Minister of State said earlier and the response of hon. Members during the debate.
Can the Minister confirm the alarming tales that we have heard from my hon. Friends the Members for Blaydon (Mr. McWilliam) and for Greenock and Port Glasgow (Dr. Godman) and from the hon. Member for Newcastle upon Tyne, Central (Mr. Merchant)? It is suggested that, under the trilateral agreement, the Germans did not take up their option and that they did not produce any of the shell casings and other equipment in 1982. We have been told that in 1983 they could not fulfil their undertakings on quality or quantity and yet that in 1984 they are demanding the lot. Is that true?
9 pm
It is also suggested that the Ministry of Defence said to the Germans, "If you give us the right delivery dates and tender price, we will let you have the order." Is that true? Was the Ministry prepared to lose all these jobs in Britain for a cheaper contract? If 1,600 ROF empolyees are made redundant, they will each cost the Exchequer at least £5,000 a year in unemployment and social security benefits. It would be cheaper to keep them at work.
What can the Minister tell us about the redundancy figures that have been bandied about? It is no good his saying that the Government are doing their best to get new orders. That is precious little comfort for the areas that have been hit.
We have heard a moving account of what is happening in Blaydon which is to lose 600 jobs. Is Germany's unemployment being exported to this country? We are also told that 460 jobs will be lost at Bishopton, 450 at Chorley,

150 at Blackburn and 600 at Birtley. Are those figures accurate? The Minister has an opportunity to come clean about the German contract.
If the factories are to be privatised, it will obviously make them more attractive if the work forces are slimmed down and the order books are subsequently boosted. That would make the factories a much more attractive proposition for privatisation. If jobs are lost in one division in the factories—probably the least profitable division—the other products will be more attractive after the contraction.
Right from the start, we raised the fears of redundancies. Minister after Minister said that there ws no need for such fears and that there was no possibility of anything like that happening. The Under-Secretary seems to be suggesting that he did not say that. Let me put it this way: Ministers did not expect that there would be any redundancies as a result of this venture.

Mr. Lee: Ministers have said repeatedly that the level of employment in particular factories depends on market demand. We have given no guarantees about the levels of employment.

Mr. McNamara: But the Government control the market and make the demands. They buy the shells and their decisions are putting people out of work. The Minister should try to understand what unemployment means, particularly in Newcastle and other areas of the north-east that have been hit time and again under this Government. There is a country north of Watford.

Mr. Lee: My constituency is in the north. I am well aware of the economic situation in the north of England, and in the north-east.

Mr. McNamara: I am pleased to hear that. The Minister should be doing something to improve it, rather than making it worse.
We have had a complete confession of failure by the Government in terms of their own timetable and organising ability. There are problems which the Government have yet to reveal to the House, and we have yet to hear their solutions to matters in the memorandum of understanding. The Government have reneged on TUPE '81 in their statements, and in the recent contract announcement they betrayed the impression that they had given to those working in the ordnance factories that their jobs were safe.

Mr. Lee: Although the debate has moved well away from the amendment, I shall, in fairness, endeavour to answer a number of the detailed points that have been made.
First, there is the question of redundancy and employment levels. During the past 10 years there has been a gradual decline in employment at the ROFs. During that period, the ROFs have been in the public sector. As my hon. Friend the Member for Littleborough and Saddleworth (Mr. Dickens) rightly said, there were 500 redundancies at Leeds because of the loss of the Iranian order in 1979. In 1981 there were about 1,000 redundancies at Birtley, Blackburn, Radway Green and Nottingham. In the 10 years from 1974 to 1984, about 2,300 jobs have been lost, and during that period the ROFs have been within the public sector.

Mr. Straw: I apologise for intervening so soon, but the Minister should not try to murder the facts. There were no job losses in the ordnance factories between 1974 and 1978.

Mr. Dickens: The hon. Gentleman's Government over-recruited.

Mr. Straw: The Minister says that there was a continuous 10-year period of job losses. In fact, the number of jobs in ordnance factories rose by 5,000 between 1974 and 1979. It is only since the present Government took office that jobs—nearly 5,000 jobs—have been lost. Why does the Minister not have the courage to admit that?

Mr. Lee: I had scarcely started my speech when the hon. Gentleman intervened. I repeat that in the past 10 years 2,300 jobs have been lost while the ROFs have been in the public sector. I accept that job levels were higher before 1974, under the Labour Administration, but there has been a constant drive for greater efficiency in the ROFs —a drive which is even stronger today.
It is understandable that the debate has concentrated on the question of redundancy. My hon. Friends the Members for Renfrew, West and Inverclyde (Mrs. McCurley) and for Newcastle upon Tyne, Central (Mr. Merchant), and the hon. Members for Blaydon (Mr. McWilliam), for Eccles (Mr. Carter-Jones) and for Greenock and Port Glasgow (Dr. Godman) have all mentioned redundancies. Some of the current rumours about jobs in the various ROFs have caused considerable concern.
I should like to speak briefly about the question of international collaboration.

Mr. McWilliam: Will the Minister explain to the House what he means by rumours? I did not refer to rumours in my speech. I referred to facts, and I want the Minister to confirm those facts today.

Mr. Lee: I shall come to that point.

Mr. Robert Kilroy-Silk: rose—

Mr. Lee: The hon. Gentleman has not contributed to the debate.
The hon. Gentleman who criticised collaboration cannot have it both ways. One cannot have the cake and the halfpenny as well. The ROFs are involved in a large number of collaborative programmes which give individual ROFs substantial amounts of work. For example, the ROFs have collaborative agreements with Mauser on the mauser gun and on ammunition, with Thompson CSF of France on the Sabre air defence system, and with EuroMetal on the L64 ammunition, with Rhinemetal on the MLRS. In terms of American collaboration there is collaboration with the Hughes Corporation on the chain gun, with Cadillac Gauge on the commando Stingray light tank, and with BMY on the universal 155 mm turret. They are collaborative programmes. The world of defence procurement is increasingly one of collaboration. The hon. Member for Yeovil (Mr. Ashdown) is nodding. He knows of the collaborative agreement with the Italians on the E101. The hon. Member for Burnley (Mr. Pike), who has a substantial Lucas factory in his constituency, knows of the number of collaborative programmes in which that company is heavily involved. But collaboration works

both ways — we cannot always expect everything to come from collaboration. We must play fair and honour our international commitments.
The FH70 involves worksharing and the honouring of an agreement made in 1970. My right hon. Friend set out the position in some detail, but as various points have been raised, I shall attempt to answer them. The memorandum of understanding was signed in 1970 between the United Kingdom, the Federal Republic of Germany and Italy for the production of the towed 155 mm howitzer, the FH70 and for its family of ammunition—three sorts of shell and three sorts of cartridge including cartridge 3, which we need to order.
Usually, in collaborative ventures the work share is equivalent to the uptake of the equipment of the guns. On that basis, the United Kingdom should have been entitled to only 20 per cent. of the manufacture. So far, it has secured 36·35 per cent. by value of the work, but has done something over 38 per cent. The ROFs have had the benefit of almost £11 million more work than they should have had. Italy has a surplus of £3·5 million, so Germany—by process of simple calculation—is owed £14 million of work. It is entitled to that and is claiming it. It is not finally agreed, but that is its entitlement and the order is virtually placed.
The hon. Member for Yeovil mentioned Bridgwater. It will still receive the explosives work. However, there is some confusion. The ammunition for the SP70 and the FH70 is exactly the same. However, the SP70 gun is only in the development stage, so we do not need ammunition for it. Vickers, as the prime contractor, has had a substantial amount of work and secured a substantial amount of employment because of that contract.
There are two other reasons why there is worry about the load position in the ammunition division. There have been enhancements in the programme during the past two or three years to build up stocks following the Falklands conflict and generally to improve the war maintenance reserve. The additional workload associated with those enhancements is now coming to an end and our requirements will return to their usual levels. During the next few years, we shall phase out certain weapons such as the 105 mm Abbott self-propelled gun and its associated ammunition. Those requirements will be replaced by new systems and natures of ammunition, for example smart munitions for the LAW 80 and MLRS. Therefore, change is taking place. It is expected that the ROFs will obtain substantial amounts of work under those programmes in the longer term. However, in the short term there is likely to be a problem. I appreciate the uncertainty, but unless new orders can be secured within the next 10 days we will move towards significant redundancies in the four factories that have been mentioned. I should be disappointed if we could not make some announcement within the next fortnight. I cannot be more precise than that. I appreciate that it is worrying for those who are, sadly, likely to lose their jobs, and I understand their distress.
9.15 pm
I resent the suggestion made by the hon. Member for Blackburn (Mr. Straw). I was surprised at him and the hon. Member for Kingston upon Hull, North (Mr. McNamara) for suggesting that the Government were artificially frigging about with contracts for the ROFs to make our privatisation policy more attractive. The fact is that we are


unlikely to privatise for between 18 months and two years. No Government who are as conscious of pounds, shillings and pence as this Government are would want to reduce the sum that it could bring to the Treasury on the sale of a substantial proportion of stock in the flotation of the ROFs. There is no logic in that suggestion and it is not worthy of the two gentleman who made it.

Mr. Carter-Jones: What the Minister is telling the House is totally predictable. What is happening in the Ministry of Defence could have been forecast. With hindsight, does not the Minister agree that the Strathcona concept of an enhanced trading fund to give continuity would have been better?

Mr. Lee: There is massive continuity in our overall spending. I remind the hon. Gentleman that we are proud of the fact that about 95 per cent. of our total MOD procurement of £8·5 billion a year is spent in the United Kingdom. We are continually striving for greater efficiency and value for money in that spend, whether orders are placed with the private sector or the ROFs. We are putting pressure on our international and national contractors. We are looking for greater value for money and efficiency in our spend, and I make no apology for that.
That matter links in with the question of the preferred source policy. As we have already announced, the preferred source policy has been ended. It is true, therefore, that the ROFs are subject to greater competition than before, but equally they are able to compete for work and projects previously denied to them. Indeed, they are actively doing that now. Earlier I cited the example of the MCV 80. The ROFs will be competing for the second tranche of that work.
We aim to approach the issue pragmatically. In some product areas we shall need to be flexible in the implementation of our policy of competition. We are aware of the employment consequences, the strategic need and the nation's dependence on the ROFs for ammunition and explosives. Therefore, we shall operate the policy with balance just as we do when we place contracts with the private sector. The competition argument will not operate in every case because of the many substantial monopolies among United Kingdom defence contractors.
We shall publish a document on the arrangement between the Secretary of State and the new company, and the regulation of his relations with it by vesting date. Regarding acquisitions, it is likely that reference will be made in that document to the ROF's need to refer to the Secretary of State before acquisitions can be made. Similarly, there is likely to be a figure, not yet agreed, on the investment limit, above which the approval of the Secretary of State must be obtained.

Mr. McNamara: What about diversification?

Mr. Lee: Diversification and acquisition mean broadly the same thing, and to that extent it also covers diversification.
I shall deal with redundancy procedures and pensions at some length because, although some of the arguments against privatisation put forward by the Opposition lacked any genuine content, I appreciate the genuine concern that is felt about redundancies and entitlement of ROF employees, who have given the nation sterling service for many years. We have made it clear that no redundancies

will arise on account of the transfer. Current Civil Service redundancy rules carry the implication that a person could claim redundancy on the grounds that he has been moved out of the Civil Service, but they do not take into account the fact that he may have been transferred with his job and terms and conditions of service intact. Paragraph 3 of schedule 2 is necessary to make it clear to the courts and everyone else that there is no question of technical redundancy arising, and I believe that that is accepted.
Because of the application of TUPE '81 the new company redundancy scheme will have to reflect as closely as possible the terms of the Civil Service scheme, although some changes will be necessary to take account of the proposed company structure. Compensation levels under the new redundancy scheme for transferred employees will be the same as those currently enjoyed by the staff in the Civil Service. As regards the Government standing behind the company in relation to redundancy payments, adequate financial provision will be made when determining the capital structure of the company.
If redundancies are announced before vesting day, the employees affected will at that time be subject to the Ministry of Defence redundancy procedures. I repeat that it is likely, sadly, that a redundancy announcement will be made in the next fortnight — a significant time before vesting day. There is no attempt to wriggle out of our commitments.
It would be our aim to carry through those procedures to the maximum extent possible by vesting day and to redeploy staff in the clearance of redundancy where that can be achieved. However, on vesting day staff employed in the ROFs will become employees of the company and will therefore be subject to the company's redundancy procedures.
The right hon. Member for Llanelli (Mr. Davies) mentioned the area of redundancy and mobility. After vesting day, the area of redundancy will inevitably be narrower than formerly, but the extent to which the position of the various groups of former civil servants will be changed will vary. For non-mobile non-industrials and all industrials the difference will not be great; it will be no more than is consistent with the transfer of their employment from the Civil Service to the company. After vesting day their unit of redundancy will be the factory in which they were working. Most affected by the change will be the former mobile non-industrial civil servants, whose area of redundancy formerly embraced the entire Ministry of Defence. Their transfer to the employment of the new company inevitably entails a considerable narrowing of that entitlement, but the Bill requires that such changes be kept to the minimum necessary in the circumstances.
It follows that although the area of redundancy for mobile, non-industrial employees must inevitably be narrowed to encompass only the company organisation, it need not be narrowed further than to encompass the entire company organisation. To comply with the provisions of the sub-paragraph, therefore, the entire company organisation will constitute the area of redundancy in respect of redundancies declared after vesting day. The company might wish to alter that, but it would entail an alteration in the terms and conditions of the contract of employment of former mobile, non-industrial civil servants as it will apply after vesting day.
Any employer may wish from time to time to change some of the terms and conditions of his work force. A


sensible employer will discuss such changes with the employees' representatives, and the object of such discussions will naturally be to reach an agreement on the proposed changes.

Mr. Denzil Davies: The Minister is saying that he hopes that the area of mobility will be the company structure, in the case of mobile employees, not just the place of work. However, I understood him to say that, at the end of the day, it will be a matter for negotiation between the company and the employees, because any change is a change in the terms of the contract of employment. He cannot give a guarantee that after vesting day mobile civil servants will have an area of mobility that covers the entire company. He can hope that that will be so, but is he saying that he cannot guarantee it?

Mr Lee: My understanding of the position is that I cannot give that guarantee, but I should hope that the ROFs, organisation and management would allow company-wide and factory-wide mobility in this context.
Pensions were mentioned earlier by my hon. Friend the Member for South Ribble (Mr. Atkins), the right hon. Member for Llanelli and the hon. Member for Eccles.
The Government have made it clear that the proposed pension arrangements for staff transferring from the Civil Service to the new organisation will provide comparable benefits to those of the principal Civil Service pension scheme, including the continuation of index-linking.
The new company pension fund will have a starting capital arising from the cash payment by the Exchequer representing the value of the potential pensions earned up to the point of transfer of those existing employees who opt to transfer the pension rights they have earned in Crown employment into the new scheme. The fund will thereafter receive further contributions from employees and employer. All three sources of revenue will be invested to generate the required return to maintain index linking.
We have made it clear that it is our view that the proposed scheme will be secure in that it will be governed by a trust deed, the provisions of which would be very difficult to set aside without agreement.
The ceiling on employer contributions that has been proposed of 12 per cent. of the total wage bill bears no relation whatsoever to the annual rate of inflation. We have been at pains to point out that the actuarial assessment is that this ceiling is high enough to cater for all but the most extreme economic circumstances and still preserve full index-linking. In the sort of hypothetical circumstances involved—we have repeated this in Committee — index-linking of civil servants' pensions under the Pensions (Increase) Act 1971 would be most unlikely to continue.
It is, of course, open to the new company to contribute more than 12 per cent. of the total wage bill to the fund each year, but it is not mandatory for it to do so. In this sense only is there a ceiling at 12 per cent., but a ceiling must be set if we are to avoid the possibility that the company could be bankrupted by its contributions to the pension fund.
The trade unions have made several representations to us about guarantees for the proposed pension scheme, and we will be responding to them shortly. The position is still open.
As hon. Members well know, the employees of the ROFs will continue to be able to represent their interests as regards pensions on the board of trustees of the separate company which is being set up to administer the pension fund.
I wish to deal at some length with TUPE '81 — [Interruption.] I can well understand some hon. Members becoming a little bored, but a great many hon. Members who have constituents who are directly interested in this have sat through the debate.
TUPE applies automatically to any case in which a business or commercial undertaking is transferred from one person, firm or company, to another. The employees employed in that undertaking are transferred with it. This is achieved by paragraph 5 of the regulations. That paragraph provides that the contract of employment between the old employer and his individual employees shall not be terminated by reason of the transfer, but shall continue after the transfer as though it had originally been made between the employee and the new employer.
It follows that terms and conditions of employment of those civil servants who transfer to the employment of the new company will remain exactly the same after vesting day as they were before it, because the contract in which such terms and conditions are set out will be exactly the same contract after vesting day as before.
There are two exceptions to this general principle. The first relates to pension schemes. These are expressly excluded from the operation of TUPE and therefore pension benefits do not transfer from the one employer to the other. That is why the new Royal Ordnance plc needs to set up its own pension scheme. The second exception relates to those terms and conditions of the Civil Service employment which are peculiar to employment under the Crown. These will not transfer: but schedule 2, paragraph 2(2), provides that the contract of employment shall take effect after vesting day as nearly as the circumstances permit. In order to apply this provision, the changes in the terms and conditions must be kept to the absolute minimum necessary to give practical effect to the transfer.
The company cannot be prevented from seeking to alter the terms and conditions of the contract of employment after vesting day. It is to be hoped that it would try to do so by negotiation with the unions, but the unions would not be bound to agree to any such proposals: they would be quite entitled to rely on the existing contract as protected by TUPE. If the company altered the terms and conditions unilaterally, the unions would have to consider what to do about it: to acquiesce, to take industrial action, or, in the case of material detriment, to bring an action for unfair dismissal. In other words, after vesting day a normal industrial relationship will prevail between the company and the unions.
I have endeavoured to deal at some length with the detailed points that have been raised. They are of considerable importance to many thousands of employees in the ROFs and to the constitutents of many hon. Members. I apologise for the length of time that I have taken, but I commend the amendment to the House.

Question put, That this House doth agree with the Lords in the said amendment:—

The House divided: Ayes 243, Noes 180.

Division No. 471]
[9.30 pm


AYES


Aitken, Jonathan
Ancram, Michael


Amess, David
Ashby, David






Aspinwall, Jack
Hamilton, Neil (Tatton)


Atkins, Robert (South Ribble)
Hampson, Dr Keith


Baker, Rt Hon K. (Mole Vall'y)
Hargreaves, Kenneth


Baker, Nicholas (N Dorset)
Harris, David


Banks, Robert (Harrogate)
Haselhurst, Alan


Batiste, Spencer
Hayward, Robert


Beaumont-Dark, Anthony
Heathcoat-Amory, David


Bellingham, Henry
Heddle, John


Bendall, Vivian
Henderson, Barry


Benyon, William
Hicks, Robert


Bevan, David Gilroy
Higgins, Rt Hon Terence L.


Biffen, Rt Hon John
Hill, James


Biggs-Davison, Sir John
Hind, Kenneth


Blackburn, John
Hirst, Michael


Blaker, Rt Hon Sir Peter
Holland, Sir Philip (Gedling)


Bonsor, Sir Nicholas
Hordern, Peter


Boscawen, Hon Robert
Howard, Michael


Bottomley, Mrs Virginia
Howarth, Gerald (Cannock)


Bowden, Gerald (Dulwich)
Howell, Ralph (N Norfolk)


Boyson, Dr Rhodes
Hubbard-Miles, Peter


Braine, Sir Bernard
Hunt, David (Wirral)


Bright, Graham
Hunter, Andrew


Brinton, Tim
Jessel, Toby


Brittan, Rt Hon Leon
Johnson Smith, Sir Geoffrey


Brown, M. (Brigg &amp; Cl'thpes)
Jones, Gwilym (Cardiff N)


Browne, John
Jones, Robert (W Herts)


Bruinvels, Peter
Kershaw, Sir Anthony


Bryan, Sir Paul
King, Roger (B'ham N'field)


Buck, Sir Antony
Knight, Mrs Jill (Edgbaston)


Burt, Alistair
Knowles, Michael


Butler, Hon Adam
Knox, David


Butterfill, John
Lawrence, Ivan


Carlisle, John (N Luton)
Lawson, Rt Hon Nigel


Carlisle, Kenneth (Lincoln)
Lee, John (Pendle)


Carlisle, Rt Hon M. (W'ton S)
Leigh, Edward (Gainsbor'gh)


Carttiss, Michael
Lennox-Boyd, Hon Mark


Cash, William
Lewis, Sir Kenneth (Stamf'd)


Channon, Rt Hon Paul
Lightbown, David


Chapman, Sydney
Lilley, Peter


Chope, Christopher
Lloyd, Ian (Havant)


Clark, Sir W. (Croydon S)
Lloyd, Peter, (Fareham)


Clarke, Rt Hon K. (Rushcliffe)
Lord, Michael


Colvin, Michael
Luce, Richard


Conway, Derek
Lyell, Nicholas


Coombs, Simon
MacGregor, John


Cope, John
MacKay, John (Argyll &amp; Bute)


Cormack, Patrick
Maclean, David John


Corrie, John
McQuarrie, Albert


Couchman, James
Madel, David


Critchley, Julian
Major, John


Crouch, David
Malins, Humfrey


Currie, Mrs Edwina
Malone, Gerald


Dickens, Geoffrey
Maples, John


Dorrell, Stephen
Marland, Paul


Douglas-Hamilton, Lord J.
Marlow, Antony


Dunn, Robert
Mather, Carol


Durant, Tony
Maude, Hon Francis


Eggar, Tim
Mawhinney, Dr Brian


Evennett, David
Mayhew, Sir Patrick


Eyre, Sir Reginald
Merchant, Piers


Fallon, Michael
Meyer, Sir Anthony


Farr, Sir John
Miller, Hal (B'grove)


Favell, Anthony
Mills, Sir Peter (West Devon)


Forman, Nigel
Miscampbell, Norman


Forsyth, Michael (Stirling)
Mitchell, David (NW Hants)


Fox, Marcus
Moate, Roger


Franks, Cecil
Monro, Sir Hector


Fraser, Peter (Angus East)
Montgomery, Fergus


Galley, Roy
Moore, John


Glyn, Dr Alan
Morris, M. (N'hampton, S)


Goodlad, Alastair
Morrison, Hon C. (Devizes)


Gower, Sir Raymond
Moynihan, Hon C.


Grant, Sir Anthony
Needham, Richard


Greenway, Harry
Nelson, Anthony


Gregory, Conal
Newton, Tony


Griffiths, E. (B'y St Edm'ds)
Norris, Steven


Grist, Ian
Onslow, Cranley


Grylls, Michael
Ottaway, Richard


Gummer, John Selwyn
Page, Richard (Herts SW)


Hamilton, Hon A. (Epsom)
Parris, Matthew





Patten, Christopher (Bath)
Stewart, Andrew (Sherwood)


Patten, John (Oxford)
Stokes, John


Pattie, Geoffrey
Stradling Thomas, J.


Pawsey, James
Sumberg, David


Pollock, Alexander
Tapsell, Peter


Porter, Barry
Taylor, John (Solihull)


Powell, William (Corby)
Taylor, Teddy (S'end E)


Powley, John
Temple-Morris, Peter


Prentice, Rt Hon Reg
Thomas, Rt Hon Peter


Price, Sir David
Thompson, Donald (Calder V)


Proctor, K. Harvey
Thompson, Patrick (N'ich N)


Raffan, Keith
Thorne, Neil (Ilford S)


Raison, Rt Hon Timothy
Thurnham, Peter


Rhodes James, Robert
Townsend, Cyril D. (B'heath)


Rhys Williams, Sir Brandon
Twinn, Dr Ian


Ridsdale, Sir Julian
van Straubenzee, Sir W.


Roberts, Wyn (Conwy)
Vaughan, Sir Gerard


Robinson, Mark (N'port W)
Waddington, David


Rossi, Sir Hugh
Waldegrave, Hon William


Rost, Peter
Walker, Bill (T'side N)


Rumbold, Mrs Angela
Wall, Sir Patrick


Ryder, Richard
Waller, Gary


Sackville, Hon Thomas
Ward, John


Sainsbury, Hon Timothy
Wardle, C. (Bexhill)


Shaw, Giles (Pudsey)
Warren, Kenneth


Shaw, Sir Michael (Scarb')
Watson, John


Shelton, William (Streatham)
Watts, John


Shepherd, Colin (Hereford)
Wells, Bowen (Hertford)


Shepherd, Richard (Aldridge)
Wells, Sir John (Maidstone)


Shersby, Michael
Wheeler, John


Silvester, Fred
Whitfield, John


Sims, Roger
Whitney, Raymond


Smith, Sir Dudley (Warwick)
Winterton, Nicholas


Smith, Tim (Beaconsfield)
Wolfson, Mark


Speller, Tony
Wood, Timothy


Spence, John
Yeo, Tim


Spencer, Derek
Younger, Rt Hon George


Spicer, Jim (W Dorset)



Squire, Robin
Tellers for the Ayes:


Stanbrook, Ivor
Mr. Michael Neubert and


Stern, Michael
Mr. Ian Lang.


Stevens, Lewis (Nuneaton)



NOES


Adams, Allen (Paisley N)
Cohen, Harry


Alton, David
Concannon, Rt Hon J. D.


Anderson, Donald
Conlan, Bernard


Archer, Rt Hon Peter
Cook, Frank (Stockton North)


Ashdown, Paddy
Cook, Robin F. (Livingston)


Ashton, Joe
Corbett, Robin


Atkinson, N. (Tottenham)
Cowans, Harry


Barron, Kevin
Craigen, J. M.


Beith, A. J.
Crowther, Stan


Bell, Stuart
Dalyell, Tam


Benn, Tony
Davies, Rt Hon Denzil (L'lli)


Bennett, A. (Dent'n &amp; Red'sh)
Davies, Ronald (Caerphilly)


Bermingham, Gerald
Davis, Terry (B'ham, H'ge H'l)


Bidwell, Sydney
Deakins, Eric


Blair, Anthony
Dewar, Donald


Boothroyd, Miss Betty
Dobson, Frank


Boyes, Roland
Dormand, Jack


Bray, Dr Jeremy
Douglas, Dick


Brown, Gordon (D'f'mline E)
Dover, Den


Brown, Hugh D. (Provan)
Duffy, A. E. P.


Brown, N. (N'c'tle-u-Tyne E)
Dunwoody, Hon Mrs G.


Brown, Ron (E'burgh, Leith)
Eadie, Alex


Bruce, Malcolm
Edwards, Bob (W'h'mpt'n SE)


Buchan, Norman
Ellis, Raymond


Caborn, Richard
Evans, John (St. Helens N)


Callaghan, Jim (Heyw'd &amp; M)
Ewing, Harry


Campbell, Ian
Fatchett, Derek


Campbell-Savours, Dale
Faulds, Andrew


Canavan, Dennis
Field, Frank (Birkenhead)


Carlile, Alexander (Montg'y)
Fields, T. (L'pool Broad Gn)


Carter-Jones, Lewis
Fisher, Mark


Clark, Dr David (S Shields)
Foot, Rt Hon Michael


Clarke, Thomas
Foster, Derek


Clay, Robert
Foulkes, George


Clwyd, Mrs Ann
George, Bruce


Cocks, Rt Hon M. (Bristol S.)
Godman, Dr Norman






Golding, John
Orme, Rt Hon Stanley


Gould, Bryan
Park, George


Hamilton, James (M'well N)
Parry, Robert


Hamilton, W. W. (Central Fife)
Patchett, Terry


Hardy, Peter
Pavitt, Laurie


Harman, Ms Harriet
Pendry, Tom


Haynes, Frank
Penhaligon, David


Healey, Rt Hon Denis
Pike, Peter


Heffer, Eric S.
Powell, Raymond (Ogmore)


Hogg, N. (C'nauld &amp; Kilsyth)
Prescott, John


Holland, Stuart (Vauxhall)
Radice, Giles


Home Robertson, John
Randall, Stuart


Hoyle, Douglas
Redmond, M.


Hughes, Robert (Aberdeen N)
Richardson, Ms Jo


Hughes, Roy (Newport East)
Roberts, Ernest (Hackney N)


Hughes, Sean (Knowsley S)
Robertson, George


John, Brynmor
Rogers, Allan


Johnston, Russell
Rooker, J. W.


Jones, Barry (Alyn &amp; Deeside)
Rowlands, Ted


Kaufman, Rt Hon Gerald
Sedgemore, Brian


Kennedy, Charles
Sheerman, Barry


Kilroy-Silk, Robert
Sheldon, Rt Hon R.


Kirkwood, Archy
Shore, Rt Hon Peter


Lambie, David
Short, Mrs R.(W'hampt'n NE)


Leadbitter, Ted
Silkin, Rt Hon J.


Lewis, Ron (Carlisle)
Skinner, Dennis


Lewis, Terence (Worsley)
Smith, C.(Isl'ton S &amp; F'bury)


Litherland, Robert
Smith, Rt Hon J. (M'kl'ds E)


Lofthouse, Geoffrey
Snape, Peter


Loyden, Edward
Soley, Clive


McCartney, Hugh
Steel, Rt Hon David


McDonald, Dr Oonagh
Stewart, Rt Hon D. (W Isles)


McGuire, Michael
Stott, Roger


McKay, Allen (Penistone)
Strang, Gavin


McKelvey, William
Straw, Jack


Mackenzie, Rt Hon Gregor
Thomas, Dr R. (Carmarthen)


McNamara, Kevin
Thompson, J. (Wansbeck)


McTaggart, Robert
Thorne, Stan (Preston)


Madden, Max
Tinn, James


Marek, Dr John
Torney, Tom


Martin, Michael
Wallace, James


Mason, Rt Hon Roy
Wareing, Robert


Maxton, John
Weetch, Ken


Maynard, Miss Joan
Welsh, Michael


Meacher, Michael
White, James


Meadowcroft, Michael
Williams, Rt Hon A.


Michie, William
Wilson, Gordon


Mikardo, Ian
Winnick, David


Millan, Rt Hon Bruce
Winterton, Mrs Ann


Miller, DrM. S. (E Kilbride)
Woodall, Alec


Mitchell, Austin (G't Grimsby)
Young, David (Bolton SE)


Morris, Rt Hon J. (Aberavon)



Oakes, Rt Hon Gordon
Tellers for the Noes:


O'Brien, William
Mr. John McWilliam and


O'Neill, Martin
Mr. Lawrence Cunliffe.

Question accordingly agreed to.

Committee appointed to draw up a reason to be assigned to the Lords for disagreeing to one of their amendments to the Bill: Mr. Butler, Mr. Denzil Davies, Mr. Lang, Mr. Lee and Mr. McWilliam; Three to be the quorum.—[Mr. Butler.]

To withdraw immediately.

Orders of the Day — Rent (Scotland) Bill

Order for Second Reading read.

The Solicitor General for (Mr. Peter Fraser): I beg to move, That the Bill be now read a Second time.
This measure consolidates in relation to Scotland certain enactments relating to rents, tenants' rights and connected matters. The Bill is pure consolidation. It has been before the Joint Committee on Consolidation Bills in the usual way and has been approved by that Committee.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Donald Thompson]

Committee tomorrow.

Orders of the Day — Foster Children (Scotland) Bill

The Solicitor General for Scotland (Mr. Peter Fraser): I beg to move, That the Bill be now read a Second time.
The measure consolidated certain enactments relating to foster children as they have affected Scotland. The report of the Joint Committee on Consolidation Bills is to the effect that the Bill is pure consolidation and there is no point to which the attention of Parliament should be drawn. I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House. —[Mr. Donald Thompson.]

Bill immediately considered in Committee; reported, without amendment.

Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 58 (Third Reading), and agreed to.

Bill accordingly read the Third time and passed.

Orders of the Day — Building Bill [Lords]

The Solicitor-General (Sir Patrick Mayhew): I beg to move, That the Bill be now read a Second time.
This is a measure of pure consolidation. Since we are approaching the close of this parliamentary session, I hope that I may be allowed to express—I believe on behalf of the whole House—our appreciation of the great labours of the Law Commission and the Joint Committee in saving this House a great deal of time at the cost of much tedious labour to themselves.

Mr. Sydney Chapman: I am grateful to the Solicitor-General for that introduction to this consolidation Bill. The occasion should not be allowed to pass without my expressing, on behalf of all those concerned with building, our appreciation that the Government have seen fit to consolidate no fewer than 42 Acts of Parliament and four statutory instruments. That will be of inestimable help to all those in the building industry.
One will have to pay no less than £7·50 to procure a copy of the Bill — assuming that when it becomes an Act the cost will be the same — but the consolation is that it would cost much more to procure all the statutes separately.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House. —[Mr. Donald Thompson.]

Bill immediately considered in Committee; reported, without amendment.

Mr. Chapman: rose—

Mr. Deputy Speaker (Mr. Paul Dean): I am sorry, but the Bill cannot be debated at this stage and I cannot call the hon. Gentleman.

Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 58 (Third Reading), and agreed to.

Bill accordingly read the Third time and passed, without amendment.

Orders of the Day — PETITION

Human Embryos

Mr. Peter Bruinvels: I beg to ask leave to present a petition from the constituency of Leicester, East, which I have the honour to represent, and from other parts of the city of Leicester.
The petition contains the names and signatures of more than 2,200 people and rightly draws the attention of the House to their opposition to the following recommendations of the Warnock committee: that experimentation on human embryos up to 14 days old should be lawful, and that it should be lawful for human embryos to be bought and sold.
The petition states:
Wherefore your petitioners pray that the Honourable Members of the House of Commons should therefore urge the Minister for Health that he recommend to the House that experiments on living human embryos be banned as well as the creation of human embryos for experimentation and human with animal fertilisation.
I heartily endorse the sentiments expressed in the petition, which has been supported by so many local churches throughout the city of Leicester. Indeed, both my wife and I are signatories. The petition ends:
and your petitioners, as in duty bound, will ever pray.

To lie upon the Table.

Orders of the Day — South-West Mackerel Fishery

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lang.]

Mr. Robert Hicks: At this comparatively early time, I am grateful to have the opportunity of raising the subject of the south-west mackerel fishery, with specific reference to the 1984 licensing arrangements. This important issue has the support of my Cornish colleagues in the House as well as of the representatives of the various fishing organisations in the county. I wish to impress upon my hon. Friend the Minister that the remarks made in this debate, particularly by the Minister, and the outcome of the meeting tomorrow at which he has kindly agreed to receive a small deputation representing Cornish fishing industries, together with me and my hon. Friend the Member for St. Ives (Mr. Harris), will be closely and anxiously studied throughout the county.
Naturally, we all hope that a satisfactory solution will result from this debate and the talks that follow. The debate has one fundamental theme—the conservation of a valuable fishing resource, the mackerel stock. There are, of course, several related and dependent issues to which I shall refer, but the need for conservation of the mackerel stock is central to my whole argument.
This is, I think, the fourteenth speech that I have made on the subject of fishing in the 14 years that I have been a Member of Parliament, but I believe that it is one of the most important. It certainly must not be considered a routine contribution to our annual fishing debate.
I shall not concern myself tonight with the history that has led to the creation of the current problems. I remind the Minister of just one comment by a Looe constituent, Mr. A. J. Pengelly, who might be described as the doyen of the Looe fishermen, if not of Cornish fishermen. Early in the 1970s, when there was an upturn in the mackerel industry and the number of boats involved in commercial fishing increased with a corresponding expansion in the number of jobs, direct and indirect. Mr. Pengelly said publicly:
We must not make the mistake of the past. We must conserve this mackerel stock.
He spoke with experience. He is a man in his early 70s who was involved in fishing from Looe in the 1920s when herring predominated, when there was over-fishing and when the shoals disappeared. Likewise, in the early 1950s pilchards became predominent but they subsequently moved away.
My constituent and all those involved in the fishing industry are worried today that the same pattern and sequence of events that occurred in respect of the herring and the pilchard will be repeated with the mackerel.
There are genuine anxieties, indeed fears, about the future viability of the inshore fishing industry. It has long been recognised that the south-west mackerel stock is of mixed composition containing a high proportion of immature fish. The so-called south-west mackerel box was introduced. It was subsequently extended in November 1983. The regulation giving that effect contained a derogation exempting hand liners, gill netters and bottom trawlers from the restrictions. Unfortunately, the exemption for bottom trawlers provided a basis for a continued trawl fishery for mackerel. Hence the reason for some of the problems today.
The European Commission, to its credit, responded and, on the basis of scientific evidence, proposed an amendment to the regulation that the mackerel box should not be opened this autumn for the larger vessels. Much to the surprise of the local fishing industry and of all five Cornish Members of Parliament, irrespective of political allegiance, the British Government argued that the amendment should not be introduced until 1 January 1985. That was in spite of the Government's previous much repeated commitment to conservation and the prevailing scientific evidence about the extent and quality of fish stocks.
In answer to questions from colleagues and myself, the Minister has repeatedly stated that the conservation aspect is regarded as a major consideration by his Department at all times. Naturally, we raised the issue with the Minister and asked why the British Government had taken such an attitude at the Council of Fisheries Ministers in September this year. My hon. Friend replied in a letter to me on 16 October 1984. It is relevant to draw it to the attention of the House. My hon. Friend said—

It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lang]

Mr. Hicks: The letter said:
As far as the arrangements for the fishery up to the end of this year are concerned, after taking into account the views of all sections of the UK industry with an interest in the fishery, Fisheries Ministers have decided that the fishery should be opened from 12 October subject to the detailed control arrangements set out in the attached press notice. These arrangements aim to strike a fair balance between all of the interests concerned. As you will see from the final paragraph of the notice, the fishery will be closely monitored with particular attention to the quantities caught, the proportion of juvenile fish and the impact of night fishing within 6 miles of the coastline within the box. The arrangements will be subject to review in the light of this monitoring and changes will be introduced if necessary.
We were very surprised that the Minister opposed the commission's recommendation.
It is also relevant to point out that at the meeting held at the Ministry in London on 3 October 1984, when all the interested parties had their regular consultative meeting to discuss the south-west mackerel fishery, Dr. Lockwood, a Ministry scientist, stated that the scientific recommendation was that there should be a nil quota for the mackerel box. However, he also stated that, if 5,000 tonnes of mackerel were taken out, he could live with that. If 10,000 tonnes were taken, that would cause him concern, and 20,000 tonnes would leave him very worried. Although my hon. Friend has never confirmed this, we believe that the Minister accepted, at least in advance theory, the figure of 20,000 tonnes.
Therefore, in spite of the European Commission's proposal, and the Minister's scientific advice about mackerel stocks, he has decided that the fishery should be open, and it was opened on 12 October. As a result, 17 Scottish trawlers came south and two fish processing factory ships, known as Klondikers, one from the Soviet Union and one from East Germany arrived. They thought that vast quantities of fish would be caught, which would be sold directly to the Klondikers.
I can report to the House what has happened 13 days after the south-west mackerel fishery was opened and licences had been given by the Department to these larger vessels. Some 11 of the 17 Scottish trawlers, together with

the two fish processing factory ships, have sailed north. The crews of the other six have gone back home, leaving their vessels tied up. It is hardly surprising that local fishing interests are both annoyed and frustrated. There is little, if any, mackerel for them either.
The ludicrous situation that has developed provides the Minister with an opportunity to correct his earlier mistaken decision. On conservation grounds, I ask him to withdraw immediately all the licences that have been issued. There is little, if any, fish in the south-west mackerel box and such a decision would be eminently sensible and practical as well as being in the long-term interests of a well-managed mackerel fishery.
If my hon. Friend is not prepared to make that decision immediately, will he extend the condition forbidding larger vessels from fishing inside the six-mile limit at night as well as during the day? That would at least give the local inshore fishing fleet an exclusive six-mile offshore band in which to fish.
All of us who have the interests of the Cornish inshore fishing industry at heart believe that the decision that was taken is not in the interests of the local fishery or of the conservation of this valuable fishing stock. That is why we ask the Minister to reconsider that decision.

Mr. David Harris: rose—

Mr. Deputy Speaker(Mr. Paul Dean): The hon. Member for St. Ives (Mr. Harris) has informed me that he has the agreement of the hon. Member for Cornwall, South-East (Mr. Hicks) and the Minister to his intervening.

Mr. Harris: I pay tribute to my hon. Friend the Member for Cornwall, South-East (Mr. Hicks) for the valuable service that he has performed in drawing attention to this whole sorry saga, which is the only way in which one can describe what has happened to the mackerel stocks, not just this winter, but since 1966.
The problems have reached a climax. The fishermen warned us repeatedly that if the situation continued unchecked, there would be no fish off the south-west about which to argue. Sadly, we seem to have reached that position.
My hon. Friend was right to describe the astonishment of the Cornish fishermen at the proceedings of recent weeks, including the meeting of Fisheries Ministers in September. I appreciate that my hon. Friend the Minister of State, Ministry of Agriculture, Fisheries and Food, has an impossible job. He is trying to get compromises that keep conflicting interests happy and in many cases that cannot be done if the emphasis is to be put on conservation. All Cornish Members have based our claims on conservation.
When the Minister asked for a postponement of an amendment to the regulation to deal with the bottom trawling loophole, he was saying, in effect, "Save me from temptation, but let me have a little more time in which to indulge in breaking the law." To be fair and accurate, what the Minister has done is to perpetuate a dodge in the Common Market regulation which everybody knows about and which the Commission itself has recognised. For reasons which I understand, the Minister has said that the loophole should not be closed until 1 January. We were afraid that by opening the fishery much earlier than in


previous years and by setting a quota of 150 tonnes per week for individual boats—higher than in recent years — the Government would encourage a stampede of Scottish boats to the south-west. The boats would fish like crazy between the opening date and 1 January when the new regulation comes into force. That has not happened, but only because the mackerel have not been there. My hon. Friend is right to urge the Minister to seize this opportunity to think again. If the mackerel reappear, so will the big trawlers from Scotland and the klondikers, and the stocks will be hammered yet again for a few months.
I have a paper produced by the Cornwall Inshore Fishermen's Federation, which sums up the whole situation in one paragraph. It states:
In 1983 MAFF attempted to prevent the deliberate misuse of the EEC conservation measure of the Box by monitoring pseudo-bottom trawling with a view to prosecution. Now that same misuse is being encouraged by MAFF. This is contrary to the interests of the EEC fishing industry and so to UK fishing. It is in response to demands from various sources that prefer short term profit to the long term benefit of the industry. It should be prevented now.
Cornish Members say amen to that.

Mr. Deputy Speaker: I understand that the hon. Member for Truro (Mr. Penhaligon) also has permission to intervene.

Mr. David Penhaligon: I congratulate the hon. Member for Cornwall, South-East (Mr. Hicks)—on this occasion I should like to call him my hon. Friend—on raising this matter. We have constantly warned successive Governments and Ministers that the degree of catching being allowed off the south-west coast of Cornwall would one day oblige the House to discuss what we would do in the event of a near total annihilation of the stock. Tonight we are discussing one of the great follies of mankind. The south-west had a resource which at its peak employed hundreds or thousands of people. If some of the large boats had been banned, it could have continued to do so. The industry is now a mere shadow of its former self. It is very sad that we should have to hold this debate.
The cause of the greatest astonishment to the people of the south-west has been the fact that at long last—to our disbelief — we succeeded in convincing the European Commission that there must be a stop. It is not the Commission but the Minister who has said "No, not yet. You can have one last go at the non-existent mackerel." If any mackerel are found, they will be sold for 4p or 5p a pound, if the fishermen are lucky. The whole industry has been sold over the past 10 years at 4p or 5p a pound, because that is the going price for mackerel.
The Minister should withdraw the licences and allow the recovery to start from the present level. If the ban does not come into force until 1 January, the recovery will start from a lower level and will take even longer. The minimum position advocated by the hon. Member for Cornwall, South-East deserves the Minister's support.

The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. John MacGregor): I am grateful to my hon. Friend the Member for Cornwall, South-East (Mr. Hicks) for raising this subject. I recognise the importance of the south-west mackerel fishery to my hon. Friend and to the Cornish fishermen. It is a subject

with which I have been much concerned since I became the Minister. I have given it a great deal of thought, not least in relation to the recent decisions, and I am glad to have an opportunity to spell out the Government's thinking.
Like my hon. Friend, I shall refer briefly to the background. The western mackerel stock is one of the major fishery resources available to the fishermen of the United Kingdom. Under the common fisheries settlement, we are allocated 58·7 per cent. of the total Community availability and our quota for 1984 amounts to 234,700 tonnes. The fishery is of great importance to the livelihoods and commercial viability of all the different categories of fishermen and vessels engaged in the industry, including the purse-seiners, the pair trawlers and, of course, the handliners—especially in the south-west, to which so much reference has been made tonight.
In view of the importance of the western mackerel stock to our industry, one of the Government's principal concerns — I have stressed this before and I stress it again—has been to ensure that the Council of Ministers, which is the ultimate custodian of the CFP, pays due regard to the vital need to ensure the conservation of the stock in the long term for the benefit of all the fishermen and other industries dependent on fishing.
I stress that, although, quite naturally, short-term considerations often loom large in the minds and pockets of fishermen. However, their real interests with regard to their livelihoods is not well served if we do not ensure that the stock remains healthy and plentiful. I wholly support the emphasis that my hon. Friend placed on that aspect tonight. However, consistent with that objective we have sought to maximise the opportunities available to the United Kingdom industry as a whole, which includes the processors.
The protection of the juvenile components of the western mackerel stock found in south-western waters has been a long-standing preoccupation of international and United Kingdom scientists. As long ago as September 1980, a limited box arrangement was included in the Community's technical conservation regulations. Last year, in line with the scientists' advice, the Commission proposed the introduction of an enlarged box within which fishing for mackerel, other than with gill nets and handlines, would be prohibited all year round. We supported that proposal as being consistent with our objectives, and it was adopted, with certain modifications by the Council of Ministers on 4 October 1983, to take effect from 16 November. Among the modifications was an important one that underlies this debate tonight—the derogation for trawls, Danish seines and similar nets of appropriate size towed on the bottom. The purpose of that derogation, which was introduced in the course of the Council's deliberations and not, I may say, at the United Kingdom's request, was to allow traditional trawl fishing for demersal species within the area of the box to proceed, which in some cases involved an unavoidable mackerel by-catch.
The derogation for bottom trawling meant that a number of trawlermen were able, with specially adapted gear, to take substantial quantities of mackerel within the area of the box — less than in previous years but sufficient to give concern to the scientists from the conservation point of view. I should emphasise that under the Community regulations as they stood, the fishermen concerned were acting within their legal rights and that our


sea fisheries inspectorate, in its monitoring and enforcement activities in the fishery, found no evidence of illegal trawling as the rules stood. None the less, from a conservation point of view the scientists considered that the derogation for bottom trawling was in practice a serious weakness in the effectiveness of the box in achieving its aim of protecting the juvenile mackerel on which, as I stressed before, the future health of the fishery so depends.
The Commission submitted a proposal in May 1983 to amend the Council's regulation, in effect, to remove the bottom trawling derogation. That proposal came forward too late for it to be properly considered before the 24 May Council and the matter was returned for further work. Modifications were discussed at official level, including the need to provide a slightly more liberal by-catch rule for genuine demersal trawlers. The Commission suggested a maximum of 25 percent. of all pelagic species, including mackerel. The proposal was then put on the agenda for the Council on 10 September.
I now come to the point of tonight's debate. We circulated the Commission's May proposal to all the main industry organisations and during the following months various sections of the industry made their views known to us both through a number of hon. Members and directly to me. It was, of course, one of the subjects of our debate in the House on 3 July.
I quickly learned when I came to have fishing responsibilities that it is not only a question of taking account of conflicting individual national interests in the Community and promoting British interests — almost invariably, there are conflicting interests within the United Kingdom as a whole and it is rarely possible to please everyone. A Minister has to be lucky to find himself in a position to do that on fishing matters — and so it has proved in this case. The Scottish pelagic fleet, and some others, made no secret of their view that the proposal to do away with the exemption for bottom trawling was unnecessary and undesirable. The south-west handliners strongly supported it on the grounds of conservation. Processors and some fishermen in the south-west wanted to see a limited trawl fishery continuing for smaller boats. I made it clear in the debate on 3 July that the Government would explore the implications of the Commission's proposal and of any alternative approaches that emerged with a view to reaching as well-balanced a solution as we could, taking fully into account the need to conserve the stock. In the course of the preparatory discussions before the Council meeting it became clear that other member states supported the Commission's proposal, as we did in principle, and that there would be no support for any alternative approach involving a limited fishery, whether for small local boats or otherwise, as some people in the south-west urged. There was no way of getting such a proposal on the table, given that the Commission would oppose it, let alone agreed in the Council.
Consistently with our objective of conservation and in the light of the clear scientific advice, we accordingly supported the Commission's proposal. But in order to give adequate notice to the fishermen and others affected and to avoid changing important rules likely to affect the take-up of our mackerel quota in the course of the quota year itself, we considered it right that there should be a short delay in the implementation of the decision to 1 January 1984. That was also agreed in the council. I recognise that for some sections of the fishing and processing industry

this decision to close off any trawl fishery for mackerel within the area of the box for at least the two remaining years for which the regulation will run, will have been unwelcome, I know that it is unwelcome to some south-western interests.
I also recognise that for others, particularly the handliners about whom my hon. Friend the Member for St. Ives (Mr. Harris) and the hon. Member for Truro (Mr. Penhaligon) talked, it would have been preferable for the decision to take immediate effect. The Government, as in all these matters of conservation and management of fisheries, have had to strike a balance, and I believe that it has been a reasonable one.
I now turn to the detailed management arrangements for the fishery until the end of the year. The first thing to be said is that these arrangements had to reconcile the conflicting interests which I have already described. Representatives of all those interests took part in a foil discussion of the problems at a consultation meeting on 3 October and the solutions which finally emerged took account of all their views. My decisions were taken after having considered all the points of view carefully. I assure my hon. Friend that I considered with great care all the implications of these issues and all the representations that we received. Indeed, I was criticised for not coming to an immediate decision following our considerations at the meeting of 3 October. The reason I did not do so was that I wanted to be quite sure that our decision had a reasonable basis.
As tonight's debate has shown a number of factors had to be taken into account. I cannot go into all of them in detail, but it may help the House to understand the complexity of the problem if I run over them briefly. There was the paramount need to ensure the protection of the juvenile stock which tends to concentrate in this fishery — I stress that aspect; the importance of ensuring adequate supplies for human consumption markets, including the requirements of onshore processors including those in the south-west; the need to protect the interests of the south-west fishermen, including the handliners and those whose use of fixed gear can be affected by other fishing methods; the request to provide early catching opportunities for Scottish fishermen, given the exceptionally late arrival of mackerel in the Minch and the closure of the west of Scotland herring fishery—my hon. Friend the Under-Secretary of State for Scotland knows that there was strong pressure on that front; and finally, the fact that the United Kingdom had only taken some 45,000 tonnes of its 234,000 tonnes western mackerel quota.
The main elements of the arrangements set up in the light of those interests are as follows. First, vessels fishing for mackerel within the box are subject to a 150-tonne weekly quota. Secondly, fishing within six miles of the: Devon and Cornish coasts during daylight is prohibited to vessels more than 10 m long, leaving the fishing during the day to the handliners. Thirdly, there is a 24-hour ban, except for vessels under 10 m and handliners, on fishing in the Start Point area to protect local fixed gear interests. It should also be remembered that there is a prohibition on fishing within three miles of the Devon and Cornish coasts by all vessels more than 60 ft long, under the local sea fisheries committee byelaws, which applies 24 hours a day.
Finally — this is an important point — we have undertaken to keep those arrangements under review, with


special attention being paid to the proportion of juvenile fish taken and the impact of night fishing within six miles of the coastline, and to introduce changes if necessary. While I was considering those matters, my hon. Friend the Member for St. Ives contacted me to discuss night fishing. I assured him then and I assure him again now that it is not an empty commitment to keep the matter constantly under review. We shall be watching carefully between now and the end of the calendar year to see what the effects are, and I assure him that if matters turn out not as we expect, we shall be prepared to make changes.
Those measures represent substantial safeguards to the interests of the fishermen for whom my hon. Friends and the hon. Member for Truro have spoken. I recognise that the local handliners would have preferred a 24-hour ban on larger vessels within the six-mile limit, but the day-time ban is a new step that demonstrates our concern to achieve a fair balance, to protect their interests and to give them some help. Another point that must be stressed is that the basic decision on bottom trawling, which will apply from 1 January, is a further significant assistance to the handliners, and is a decision that has been taken. The hon. Member for Truro said that he had urged for a long time that a decision be taken along those lines. It has been taken, and the scheme will operate from 1 January. I repeat that we shall monitor closely all aspects of the fishery, and the rules will be strictly enforced by our fisheries inspectorate and our fishery protection forces.
In view of what my hon. Friend the Member for Cornwall, South-East said about scientific evidence, I should say that our scientific advisers believe that a limited fishery from now until the end of the year is unlikely to make a significant difference to the longer-term health of the stock. That depends upon the amount of juvenile mackerel likely to be taken. That is why we shall monitor the fishery closely, especially in relation to the proportion of juvenile mackerel in the catches. We have warned the industry that the arrangements will be subject to review in the light of such monitoring, and that changes will be introduced if necessary.
It is less than two weeks since the fishery opened, and although it is difficult to forecast how it will run for the rest of the year, there is no evidence so far to show that the measures are anything but effective.

Mr. Penhaligon: There are no fish.

Mr. MacGregor: Of coruse, I recognise that there are problems with the present stocks of fish, which is why catches of mackerel in the area have been light. However, I have already said that we shall monitor closely this fishery an the new arrangements during the weeks ahead.
As my hon. Friend the Member for Cornwall, Sourth-East said, although several Scottish trawlers arrived for the opening they have not made significant catches of mackerel, and several have now returned to the Minch fishery following the arrival of the mackerel off the west coast of Scotland. If the Minch proves to be productive, and if catches in the south-west continue to be low, it is possible that there will be no large influx of vessels to the south-west fishery. I should stress that there will be another eight weeks of fishing before the Christmas break, and I repeat that thereafter the mackerel box will be fully protected by the new rules.
In conclusion, I should say a word about the outlook for the western mackerel fishery. For the years immediately ahead, reduced catches seem inevitable as a result of poor recruitment from the 1982 and 1983 year classes, which were well below average. That is a biological fact quite independent of the conservation measures taken. What happens in the medium and longer terms will depend upon the strength of the 1984 and subsequent year classes. The improved protection afforded by the box, at least during the next two years, will help to ensure that the new year classes will make their maximum contribution to the fishery in due course and should, we hope — that is the intention — avert the spectre of stock collapse which, had no effective action been taken, could have hung over us.
I again thank my hon. Friend the Member for St. Ives. I recognise his anxiety, and I am therefore grateful for this opportunity to spell out the position. Should events prove to be such that the stock is threatened, I assure him that we shall take action before the end of the year. However, thereafter, the box with the new arrangements will be in place.

The Question having been proposed afer Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned accordingly at half-past Ten o'clock.